WASHINGTON ― Significant problems remain at a formerly for-profit college that the Obama administration rescued from near collapse, an Associated Press review has found, despite new federal oversight and pledges of a turnaround by the schools’ current nonprofit owner.
Everest University was once the flagship brand of Corinthian Colleges Inc., a for-profit school chain. Allegations of fraud and mismanagement nearly felled school before the Education Department helped transfer Everest and a sister institution to Zenith Education Group, a nonprofit affiliate of a student-loan debt collection firm.
Zenith pledged to transform Everest, ending the school’s habit of admitting “anyone with a pulse” and churning out unprepared graduates deeply in debt.
But a year after Zenith formally took control of Corinthian’s flagship Everest brand and its smaller sibling, WyoTech, revolutionary change is hard to find.
Everest has shrunk to about 15,000 students from 70,000 at the time of Corinthian’s failure, lowered tuition by 20 percent and shuttered some of its worst performing programs. More changes are planned, although an AP review found Everest is still operating largely according to Corinthian’s for-profit business model.
Zenith still recruits students through large-scale telemarketing. Major changes to its curriculum have not yet occurred. It has retained senior Corinthian executives in key posts. It continues to recruit students using some of the very same ads that Corinthian ran during the very same daytime TV talk shows.
Recent graduates told the AP they are struggling to find work that would allow them to pay back their student loans, raising the prospect that the government is seeding a new crop of loan defaults. The average post-graduation employment rate among Everest’s online programs ― for which data is most readily available ― was less than 46 percent in the academic year ended last June.
“I graduated in April at the top of my class, with honors,” said Shane Satterfield, a roofer in Georgia who now owes more than $30,000 in debt for the associate’s degree in computer science he completed last year. “And I can’t get a job paying over $8.50 an hour.”
