NEWS 8 INVESTIGATES
ARLINGTON — Daytime television, the Internet and newspaper classifieds are crammed with ads for for-profit career colleges.
There's only one reason students spend thousands of dollars to go to such a school: jobs. They're hoping for work as medical assistants, medical billing specialists and pharmacy technicians.
That's why Teri Praay and Jyoti Tanwar signed up at Everest College in Arlington — Teri to learn about medical coding and billing, Jyoti as a pharmacy technician.
The school isn't cheap, charging $12,500 to $16,000 depending on the course.
Joyoti's father saw a commercial on TV that made him think Everest would be a great deal. He and his daughter went to the campus for an interview.
The Tanwars said recruiters told them Jyoti could expect a job paying $14-$15 an hour after graduation. They were told Everest career counselors would help her find employment.
The Tanwars said they were told it was a sure thing.
But now, more than a year after graduation, there's no job, despite several applications on Jyoti's part.
Jyoti and her father are paying $310 a month between them on federal loans, which won't be paid off until 2018.
Mr. Tanwar said he didn't even know he signed a loan until he started getting bills in the mail. He knows it's an obligation he can't break, and Tanwar — a recent immigrant from India who speaks halting English — is resigned to his financial fate.
"You gotta pay it back somehow," he said, "no matter how."
Teri Praay has $9,000 left on her Everest note, with no job either.
She quit her previous work to enroll in school, arranging daycare for her young daughter as her husband rearranged his work schedule to accommodate her classes.
This fits into a pattern of student disappointment and deception that News 8 has discovered repeatedly in a five-year investigation of for-profit schools.
Both Ms. Tanwar and Mrs. Praay were shocked to find out that as far as Everest College was concerned, they were employed.
Ms. Tanwar and Mrs. Praay, according to records filed with the state, worked for two companies — one called Paramount Multi-Services, the other, Alexus Dutchess.
"I never heard of them," said Ms. Praay, referring to Alexus Dutchess.
"I never worked at Paramount Multi-Services," said Ms. Tanwar. "And Everest never got me a job."
A News 8 investigation finds that the employment records of 288 former students of Everest were falsified over four years by the school.
Everest College is part of the Corinthian Colleges (NYSE: COCO) system, which has 122 campuses nationwide and has grossed more than $1.7 billion last year.
"Gainful employment" for former students is important for two reasons:
New students are recruited using employment statistics of graduates.
The government requires 60 percent of graduates to acquire jobs in their field of study for the school to participate in federal loans and grants.
Corinthian colleges depend on federal money for 84 percent of their tuition income, according to the company's Securities and Exchange Commission filings.
Further, a recent Government Accounting Office investigation found widespread recruiting problems at for-profit colleges.
The Senate Education Committee had hearings on the subject, and the future of federal funding for the industry may be in question.
Two-hundred and eighty-eight falsified jobs may be nothing compared to Cornithian's thousands of enrollees, but in response to scrutiny from Washington, Corinthian recently launched a print public relations campaign, starring one of its graduates with the cut line: "Even before I graduated, I already had a job waiting for me and I ended up falling in love with it."
News 8 asked to interview "Carolyn," who appeared in the ad. We were denied access by Corinthian.
We were equally unsuccessful in acquiring for-profit school records from the State of Texas.
For-profit schools, also known as career colleges, are policed by the Texas Workforce Commission, the TWC. Schools file annual documentation with the TWC on students enrolled and placed.
News 8 asked for the information under the Texas Public Information Act and were denied access. The TWC contends that the names of students and their employers are protected under federal law.
The result is that no eyes — except those of the TWC — ever examine the outcomes of thousands of students at Texas for-profit schools.
It's clear the TWC is not looking, based on records News 8 has obtained.
Column after column of students were listed on TWC forms as "employed" at the oddly-named firm Alexus Dutchess — 176 in all, as shown in records News 8 eventually obtained from sources.
Alexus Dutchess turns out to be a paper company, used by Everest's former career services director Irma Spears. The company was created by Katherine "Dutchess" Henderson, a friend of hers.
Paramount Multi-services is shown as employing 112 former Everest students. That company did exist, but it never provided 112 jobs to students, as records show.
All of this would have remained secret if News 8 had not confronted Corinthian about it.
The TWC wasn't telling anybody.
In an interview with News 8, when asked about Alexus Dutchess, TWC spokeswoman Ann Hatchitt said, "This is really wonderful information for us to use, for us to look into Everest."
TWC refused to let any of its career school administrators be interviewed; only Ms. Hatchitt was made available.
Teri Evans, a former admissions director at Everest, said she complained about records falsification to the TWC in June — after she quit her job.
"I have gotten no response (from the TWC)," she said. "Not even a a 'thank you for your information.'"
When News 8 discovered the existence of Alexus Dutchess and Paramount Multi-Services, Corinthian released a letter it wrote to the TWC dated August 6, outlining its discovery of falsified records on its Arlington campus. The company describes the doctored records as the work of three "rogue" employees.
An affidavit signed by "Irma Spears" said she committed the falsifications of her own accord.
It is clear, however, that the longevity of a career services director would be closely linked to how many students were placed in jobs.
The falsifications began in 2007, despite the formation of an audit unit at Corinthian that was supposed to detect anomalies in records.
Paramount Multi-Services, unlike Alexus Dutchess, did exist. But it employed only seven Everest students instead of 112.
Also, rather than being a mail-order pharmacy, as Corinthian described the business, the company's founder said Paramount was a phone bank that lost its business to the Phillipines.
Since obtaining jobs for students is so critical, Corinthian offered to update its job placement numbers, which it is supposed to release to prospective students — numbers now significantly reduced because of the falsifications.
Instead of a placement rate of about 70 percent among among medical assistant, medical coding and billing and pharmacy technicians, the school now has a 40 percent placement rate for the most recent year available.
To its credit, Cornithian wanted to change its records to reflect that. Surprisingly, the Texas Workforce Commission wouldn't let them.
Instead, the TWC uses the old, higher placement percentages.
When students are recruited, Corinthian says, they are quoted lower job placement numbers adopted by Everest's accrediting body.
In a written statement released to News 8, Corinthian apologizes to its former students, who were "systematically deceived." It says they can come back for refresher courses, and that it will continue to offer job placement services.
Corinthian urges former students to contact the school immediately.
Corinthian says it has now added "additional steps" to the job verification process.
Corinthian has six campuses in addition to Arlington throughout the state. The TWC has not announced any action against the company.