In Corinthian Colleges Collapse, Students Wonder What's Next

Osmin Soto had been downsized from two jobs in the construction industry and had gone to work for his dad, a general contractor in Los Angeles, when he decided it was time to make a change. At age 29, he could claim only a high school diploma and a certificate in computer-aided drafting and design, from a local vocational school. He sought a new trade that would get him a higher-paying job.

This is how he found his way to a school called WyoTech in Long Beach, California. He could earn a degree in less than a year. A representative promised help with career placement. The price tag: $23,000.

I was in dire need of something better for myself, Soto says. When I went in for the initial meet, they promised me a better job, better wages, that students made a lot more money coming out of school.

Soto is due to graduate next month, but he now wonders if his degree will have any value. He is one of approximately 70,000 students across the country caught in the collapse of Corinthian Colleges, WyoTechs owner, amid allegations of false job placement data, and multiple state and federal investigations.

In June, the Department of Education restricted Corinthians access to federal financial aid the source of approximately 85 percent of its revenues sending the for-profit college company into a financial tailspin, and ultimately resulting in a deal: regulators agreed to keep some money flowing to the company, and Corinthian agreed to sell 85 of its 107 schools within six months, and close a dozen others.

Far from the board room machinations of a profit-making corporation squaring off with regulators, many students at Corinthians campuses have found themselves struggling to gain answers to simple yet crucial questions: Whats going to happen to my school? Will the degree that was supposed to be a big investment in a brighter future turn out to have been a very expensive mistake?

When I graduate, when youre going to have a diploma from a school that disappeared or closed down, will I really be taken into consideration? Soto says. Can I put that on my resume?

Corinthian's Bad Grades

Headquartered in Santa Ana, California, Corinthian bills itself as a company focused on meeting the job-oriented needs of nontraditional students through its Everest, Heald and WyoTech brands. CEO Jack Massimino led the company to $1.6 billion in revenue, offering programs ranging from medical assisting to criminal justice, and motorcycle technology. In its most recent annual report, Corinthian claimed that it placed 69 percent of its graduates in jobs.

But the for profit-college industry has increasingly come under fire for leaving students mired in debt, sans well-paying jobs, and the Obama administration has proposed more stringent accountability measures, known as the gainful employment rule.

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In Corinthian Colleges Collapse, Students Wonder What's Next