Corinthian College, which also operates institutions running and known as Heald College, Everest College and WyoTech, has been sued by the Consumer Financial Protection Bureau (CFPB) based on allegations that it misled students about their post-graduate job prospects and employment placement and assistance programs.
Here's how the scheme is alleged to work: (1) the for-profit college would lure students into enrolling by deceiving them about their job prospects after they got their degree (for instance, it is alleged that the college counted even one day of employment by a graduate as a job placement); (2) the students would get federal financial aid and/or student loans to pay a portion of their tuition; and, (3) the for-profit college would lure and deceive the students into taking additional loans to cover the rest of their tuition bill from a company that the college secretly controlled. These loans carred exorbitant interest rates. So the college would get money from the students by the federal financial aid and then assure a continuing revenue stream from the paybacks from the loans made by its own company. Too bad for the students that were duped into taking the loans based on the for-profit college's lying about the value and use of their degrees, that is, at least according to the lawsuit.
Source: USA Today
This lawsuit makes it appear that the for-profit college was engaged in what Steely Dan called A Royal Scam:
