BUZZFEED: Why The Government Supports Everest University’s Controversial Sale

Career College Central Summary:

  • The Department of Education has landed in hot water among critics for its enthusiastic endorsement of the sale of a group of for-profit college campuses to a controversial student loan agency.
  • The Department of Education reached an agreement to essentially shut down Corinthian Colleges, one of the country’s largest for-profit college operators, forcing the company to sell off or close all of its campuses nationwide. A BuzzFeed News investigation this month showed Corinthian, owner of the Everest University chain, to be one of the worst actors in a controversial industry, using aggressive and deceptive sales tactics to lure poor and minority students into overpriced degree programs.
  • But when the nonprofit ECMC Group announced plans last week to buy 56 of Corinthian’s campuses, many eyebrows were raised. Critics questioned every aspect of the sale, alleging that ECMC, which has no experience in operating any institution of higher education, is woefully unprepared to take on the task of rehabilitating some of the country’s most troubled college campuses.
  • The federal government disagrees. In a press release lauding the deal, the Department of Education emphasized the schools would be converted to nonprofits and said it was “pleased to help students transition from a problematic for-profit company to a nonprofit that is committed to giving students a new start and more opportunities for success.”
  • That praise contrasted with the concern among ECMC’s critics. The student loan agency has been accused of “ruthless tactics” in trying to prevent people from discharging their debt via bankruptcy, and a for-profit debt-collection agency owned by ECMC Group, Premiere Credit, has been criticized for predatory and unethical tactics in several recent reports.
  • “Any group with no expertise as an education company, I would have said it was strange,” said Ben Miller, a senior research analyst with the New America Foundation. “But this one in particular has a history of extremely aggressive tactics and extremely high compensation for its CEO and debt collector — it raises a lot of questions.”
  • The question is this: Why would the Department of Education endorse such a sale?

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