Attorney General Kamala D. Harris Obtains $1.1 Billion Judgment Against Predatory For-Profit School Operator

Wednesday, March 23, 2016
Contact: (415) 703-5837, agpressoffice@doj.ca.gov

LOS ANGELES – Attorney General Kamala D. Harris today announced that her office has obtained a $1.1 billion judgment against defunct Corinthian Colleges, Inc. (CCI) for their predatory and unlawful practices. While CCI filed for bankruptcy in May 2015, this judgment can help secure further relief for struggling students.

Former Corinthian Students should visit the Attorney General’s Interactive Tool for tailored information to help them locate needed resources and relief.

In October 2013, Attorney General Kamala D. Harris led the charge against CCI and its subsidiaries that operate Everest, Heald, and Wyotech colleges, filing suit seeking to put an end to abusive practices that left tens of thousands of students under a mountain of debt and useless degrees. CCI filed for bankruptcy in May 2015. Today, the Court granted a default judgment against CCI.  In the judgment, the Court ordered restitution on behalf of students in the amount of $820,000,000 and civil penalties totaling $350,025,000, for a total of $1,170,025,000 in monetary relief. 

“For years, Corinthian profited off the backs of poor people – now they have to pay. This judgment sends a clear message: there is a cost to this kind of predatory conduct,” said Attorney General Harris. “My office will continue to do everything in our power to help these vulnerable students obtain all available relief, as they work to achieve their academic and professional goals.”

Attorney General Harris’ original complaint alleged that CCI intentionally targeted low-income, vulnerable Californians through deceptive and false advertisements and aggressive marketing campaigns that misrepresented job placement rates and school programs. CCI deployed these advertisements through persistent internet, telemarketing and television ad campaigns. The complaint further alleged that Corinthian executives knowingly misrepresented job placement rates to investors and accrediting agencies, which harmed students, investors and taxpayers. The Attorney General filed many of these documents in Court before entry of the Court’s judgment, and they are now publicly available.

In the Final Judgment, the Court found, among other things, that:

  • From at least 2009 until the closure of its schools, many of CCI’s representations and advertisements related to job placement were untrue and/or misleading.   In numerous cases, the placement rate data in CCI’s files show that the actual placement rate is lower than the advertised rate.  The placement rates that CCI published were systematically false, misleading, erroneous and/or failed to comply with applicable state and federal regulations and/or accreditor standards.  In addition, many of these published placement rates could not be substantiated using CCI’s own internal placement data and files. 
  • CCI did not offer ultrasound technician programs, x-ray technician programs, radiology technician programs, or dialysis technician programs in California.  Despite this fact, from at least 2010 until the filing of this action, CCI ran millions of ads stating that they did offer those programs.  CCI executives knew that these false ads misled students.
  • CCI unlawfully used the official seals of the United States Department of the Army, the United States Department of the Navy, the United States Department of the Air Force, the United States Marine Corps, and the United States Coast Guard.
  • CCI’s enrollment agreements contained unlawful clauses.
  • CCI engaged in unlawful debt collection.
  • CCI failed to discloses its role in the Genesis Private Student Loan Program.
  • CCI misrepresented the transferability of credits.
  • CCI misrepresented its financial stability to students.

In April 2015, Attorney General Harris and eight other state Attorneys General sent a letter to the U.S. Department of Education urging immediate debt relief for the students who attended Heald College and other CCI campuses.  In May 2015, Attorney General Harris sent a letter to U.S. Department of Education Secretary Arne Duncan, asking the Department to exercise its authority under closed school discharge regulations to provide aid to students affected by Corinthian’s predatory practices.  In June 2015, after calls from Attorney General Harris for substantive relief for students suffering from crippling debt, the U.S. Department of Education announced expanded debt relief options for Corinthian students, which resulted in many more students being eligible for relief.  

Attorney General Harris remains committed to protecting vulnerable students, most recently through the Department of Education’s negotiated rulemaking sessions on borrower defense, where Attorney General Harris called for revisions to proposed borrower defense regulations to ensure meaningful debt relief for students misled by predatory for-profit colleges. 

A copy of the judgment is attached to the electronic version of this release at: https://oag.ca.gov/news 

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PDF icon Corinthian Final Judgment.pdf1.01 MB