SAN FRANCISCO (CBS SF) — Students who attended Everest and Wyotech colleges in California or attended online programs at Everest nationwide will now have an easier time obtaining debt relief, state and federal officials announced Tuesday.
In a move that could affect as many as 85,000 students, the U.S. Department of Education and California Attorney General Kamala Harris today released the results of a joint investigation finding that Everest and Wyotech misrepresented job placement rates to both enrolled and prospective students.
Everest and Wyotech colleges operated Bay Area campuses in Hayward, San Francisco, San Jose and Fremont. Job placement rates at those schools were misstated to students by anywhere from 3 to 15 percent, depending on the program, federal officials said today.
The findings will streamline the debt relief application process for students who attended the for-profit career colleges between 2010 and 2013.
Harris first filed a lawsuit in 2013 against parent company Corinthian Colleges Inc., which also owned Heald College, alleging false advertising and defective marketing.
After federal officials also launched investigations and placed restrictions on Corinthian’s access to federal loan funds in 2014, the company sold most of its Everest and Wyotech campuses in November of that year.
Corinthian shut down all of its remaining campuses and ceased operations in April this year shortly after the U.S. Department of Education announced a $30 million fine for predatory lending practices and misleading marketing at Heald College.
Some students enrolled at Heald College and other Corinthian schools when they closed were already eligible for a discharge of federal loans based on the closure, while others enrolled between 2010 and 2014 who relied on misstated placement rates can apply for streamlined debt relief.
Today’s announcement extends that option to all Everest and Wyotech students in California during the years covered by the finding. Previously, students at those schools would have had to demonstrate that they were entitled to debt relief on an individual basis, a much more difficult task.
Federal education department officials today said investigations involving Corinthian campuses in other states are still ongoing.
Ted Mitchell, undersecretary for the U.S. Department of Education, said today that as of Nov. 4 the department has received more than 10,000 closed school discharge claims and approved more than 5,000 of them. It has also received more than 6000 borrower defense claims, Mitchell said.
Harris today said tens of thousands of Californians enrolled in Heald, Wyotech and Everest because they thought they were investing in their futures. The company’s marketing targeted low-income students and others it considered vulnerable, she said.
“Many of these students were left unemployed and saddled with mountains of debt,” Harris said. “It’s critical we provide these students with a path to get out from under that debt and get on with their lives.”
Students who attended Corinthian schools and want to apply for debt relief can do so through at http://oag.ca.gov/corinthian or at https://studentaid.ed.gov/sa/about/announcements/corinthian.
Today’s announcement follows a massive settlement announced Monday by Education Management Corporation, the parent company for the Art Institute of San Francisco, with the U.S. Department of Justice and attorney generals in 39 states.
The settlement resolves allegations that the company engaged in overly aggressive recruiting practices, enrolling students with little chance of succeeding in college. While the company continues to maintain the claims were without merit, EDMC agreed to increase disclosure to students on graduate placement rates and student debt loads and allow tuition-free withdrawal at the start of the term.
In addition, the company agreed to automatically forgive debts owed by former students who dropped out within 45 days of enrollment with fewer than 24 hours of credits between January 2006 and Dec. 31, 2014.
More than 80,000 students nationwide and more than 5,000 in California alone are eligible for debt relief under the terms of the EDMC settlement, according to federal officials.
EDMC also reached a $1.95 million settlement last year with San Francisco City Attorney Dennis Herrera over allegations that it misrepresented job placement rates and student debt loads to students at the Art Institute. The company closed some Art Institute campuses earlier this year including one in Sunnyvale, but the San Francisco campus remains open.
© Copyright 2015 by CBS San Francisco and Bay City News Service. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.