Thread regarding Zenith Education Group layoffs

Wow Kamden. Are you going to pay royalties to all of the people here that have given you information on the book you will publish? I'm certain when you quote, "The Layoff" it will be a credible source.

You've outlined the post-peak period very nicely. However, I'd suggest starting at the founding of Corinthian (c. 1995), but the history of the first ten years is more about expansion, which paralleled the housing bubble. Things start getting interesting around 2005. That's slightly before the peak. Around 2009, thing especially are interesting, as the enrollment numbers were good enough to pay those in admission's enrollment bonuses (recall that this is before the GE employment rules, which prohibit such today), yet the cracks in the ice were clear to those who were looking for such.

A couples things Camden, I believe the sale didn't officially happen until February 2015. You also forgot to mention that in April 2015 Zenith Education terminated the employment of over 1000 employees they hoodwinked into believing that they had been offered employment with Zenith. Again in September 2015 Zenith terminated another 500 employees and continued terminating employees through June of 2016.

Here's a Corinthian College/Zenith Education timeline that I have from 2013 to the present. What have I missed?

(October 2013)

Attorney General Kamala Harris Filed Suit in Alleged For-Profit College Predatory Scheme

https://oag.ca.gov/news/press-releases/attorney-general-kamala-d-harris-files-suit-alleged-profit-college-predatory

(June 2014)

ED put a 21-day hold on government funds to Corinthian Colleges, which led COCO to tell shareholders it might have to shut down. The hold came after COCO failed to comply with requests for information.

(July 2014)

US Department of Education (ED) and Corinthian Colleges (COCO) reached an agreement for COCO to execute a controlled shut-down of 12 of its schools and a sale of 85 other schools with transition funding supplied by ED and monitored by an independent monitor.

http://www.latimes.com/business/la-fi-corinthian-colleges-agreement-20140704-story.html

(September 2014)

Occupy activists abolish $3.85m in Corinthian Colleges students' loan debt.

https://www.theguardian.com/money/2014/sep/17/occupy-activists-student-debt-corinthian-colleges

(November 2014)

Sale of Corinthian Colleges to ECMC for $24M.

(February 2015)

Corinthian Collective Debt Strike Begins. Called the first US college debt strike.

https://www.democracynow.org/2015/2/25/students_launch_historic_debt_strike_refusing

(February 2015)

Educational Credit Management Corporation's subsidiary Zenith Education Group acquired 56 Everest College and WyoTech campuses from Corinthian. Zenith planned to transition the schools from for-profit to nonprofit status. It also planned to eliminate some programs with poor completion and job placement rates.

(April 2015)

Attorneys general in nine states, including California’s Kamala Harris, called for Arne Duncan and ED to erase debts owed by students of troubled giant Corinthian Colleges.

http://www.ocregister.com/articles/corinthian-657436-students-general.html

Heald and Wyotech closed campuses in California, April 27, 2015. Campuses with little to no revenue along with the 15 Everest campuses in California, which were not acquired by ECMC, closed their doors for good when Corinthian Colleges shuttered all of their remaining campuses.

http://abc7news.com/education/students-shocked-over-heald-college-closure/683817/

(April 2015-present)

Podesta Group begins lobbying for ECMC

http://www.opensecrets.org/lobby/firmsum.php?id=D000022193&year=2014

(May 2015)

Corinthian Colleges, Inc. and 24 of its subsidiaries filed for Chapter 11 bankruptcy in the US Bankruptcy Court, District of Delaware.

As a part of its purchase of half of Corinthian’s 107 campuses, ECMC Group reached a settlement with a company that bought a majority of the Genesis portfolio to write down $480 million of the debt. The Department of Education gave nearly two thirds of the $12 million it received from ECMC to cover any penalties that could arise out of the government’s ongoing probe of Corinthian.

(May 2015) Corinthian College students use Defense to Repayment claims.

https://www.insidehighered.com/news/2015/05/06/us-charts-new-debt-relief-process-implications-beyond-corinthian

(October 2015)

A federal judge ordered Corinthian Colleges to pay $550 million to the Consumer Financial Protection Bureau, resolving a year-long lawsuit against the for-profit chain for allegedly steering students into predatory loans (Genesis Loans).

https://www.washingtonpost.com/news/grade-point/wp/2015/10/28/government-watchdog-wins-530-million-lawsuit-against-for-profit-corinthian-colleges-too-bad-it-will-never-see-a-dime/

(March 2016)

San Francisco Superior Court awards $1.1B judgment for false advertising

http://sanfrancisco.cbslocal.com/2016/03/24/corinthian-colleges-ordered-to-pay-nearly-1-2-billion-to-students-state-of-california/

(May 2016)

ED appoints Clark Ervin (Patton-Squire Boggs law firm) to monitor Zenith after previous monitor was removed for possible conflict of interest. Zenith had input in the decision.

http://www.huffingtonpost.com/davidhalperin/new-law-firm-monitor-for_b_10172900.html

(July 2016)

Zenith receives $250M infusion from ECMC Foundation.

(September 2016)

Senator Elizabeth Warren sent a letter urging Education Secretary John B. King Jr. to provide the immediate debt relief that Corinthian students are entitled to under federal law. The department has broad authority to cancel federal student loans when colleges violate students’ rights and state law, exactly what education officials accused Corinthian of doing. Yet the agency continues to collect on debt owed by tens of thousands of people eligible for forgiveness.

https://www.washingtonpost.com/news/grade-point/wp/2016/09/29/feds-found-widespread-fraud-at-corinthian-colleges-why-are-students-still-paying-the-price/

just to be clear--

That's education department of the school, not the Federal Department of Education.

Camden Kid- 1970s is going too far back. The financial collapse resulted in a high level of unemployment, including the 99ers.

Tragedy of commons--

Too many students decided to return to school at once. After paying large bonuses to those in admissions, the education department wasn't really prepared for the big increase in students. This causes all kinds of quality problems, but getting over that, career services could not place students because the economy didn't suddenly demand that big bulge of new graduates all at once.

This is likely why the Gainful Employment regulations came about. So many students complained all at once about being ripped off by the for-profit schools.

Comments on this?

For profit colleges grew in response to increased government funding from the early 1970s to the present and deregulation from the 1990s onward.

The bubble in subprime colleges was just as much a part of ED decisions as it was from corporate power. Strong financial relationships between government officials and corporations ensued.

State AGs and some federal oversight provided some resistance to the increasing power of subprime colleges.

The oversight of Corinthian Colleges (and heighted cash monitoring) was a decision by the US government after many years of investigations about corruption--but few strong responses.

Corinthian Colleges was losing money for the US government and this was not sustainable.

It is alleged that ED approached ECMC (a debt servicer) to buy Corinthian Colleges (CCi) at least one month before CCi collapsed. It is also alleged that there was to be a quid pro quo for ECMC to take some of the failing colleges (ECMC would get billions of dollars in debt portfolios to service).

My hypothesis is that ED was concerned about the moral hazard of too many CCi students getting debt relief, so defense to repayment (DTR) was limited. The thought was that the program should not be so expansive that it could not be controlled.

In 2014, Podesta Group, a powerful DC lobbying group, was hired to represent ECMC in Washington, DC.

ED responded to the subprime college problem by taking powers away from one of their accreditors, ACICS. But ECMC, it is alleged, was tipped off about the potential action.

Because the government response has been limited, and because of political connections, the debt bubble continues...

@KuuuIKp-5hwe, I am well aware of the allegations about * but I cannot do anything without more proof. An investigation has been ongoing for years without indictments. I know about CREW's FOIA requests and have scanned through the 700+ pages.

What more can you tell me?

What can you tell me that would prove that ED approached ECMC before the 21-day hold and that ED promised a certain amount of loans to service?

https://www.scribd.com/document/237998689/Responsive-Documents-CREW-Department-of-Education-Regarding-Investigation-of-Former-Education-Official-Robert-Shireman-7-31-14

http://www.rollcall.com/news/education_official_who_left_under_ethical_cloud_returns_to_washington-234751-1.html#sthash.x18F2Ug9.dpuf

Good job on the research. It is clear watching Everest that there is something shady going on, that explains much of it. I just have never been able to figure out why it still exists. The degree is worthless, they still get new students, the classes are elementary level, the Assistant Deans are extremely corrupt and are a joke. Your post explains a lot of this, I always knew it was money based and figured the Democrats were in there somewhere stealing money.

Thanks.

"Many insiders from the DOE bought and short sold CCi stock forcing the stock prices to tank. The Obama administration was out to bankrupt CCi forcing it to sell to ECMC for pennies on the dollar. " This is what CK should be investigating but I doubt he has the brain power to make sense of it. Read up on this TRUTH

http://www.politico.com/story/2016/06/former-obama-insiders-seek-administrations-blessing-of-for-profit-college-takeover-224917

"As the Obama administration cracks down on for-profit colleges, three former officials working on behalf of an investment firm run by President Barack Obama’s best friend have staged a behind-the-scenes campaign to get the Education Department to green-light a purchase of the biggest for-profit of them all — the University of Phoenix.

The investors include a private equity firm founded and run by longtime Obama friend Marty Nesbitt and former Deputy Education Secretary Tony Miller. The firm, Chicago-based Vistria Group, has mounted a charm offensive on Capitol Hill to talk up the proposed sale of the troubled for-profit education giant, which receives more than $2 billion a year in taxpayer money but is under investigation by three state attorneys general and the FTC."

In addition to Everest avengers, get Century Foundation to look into the quid pro quo issue. DOE should respond to them. See if DOE IG will take a look.

CK: leave us alone. Are you really going to write articles on what you hear on layoffs? Wow.

ECMC was approached by the DOE about buying the CCi schools before the DOE put CCi on heightened awareness back in 2014. If you investigate the time table of Zenith Education Group you will find it was in the planning stages a month before the DOE dropped the hammer on CCi. The only problem that prolonged the total demise of CCi was the allegations that many democratic brought against CCi, started by California AG Harris. Many insiders from the DOE bought and short sold CCi stock forcing the stock prices to tank. The Obama administration was out to bankrupt CCi forcing it to sell to ECMC for pennies on the dollar. When CCi finally caved in to the sale in late 2014 it took ECMC only 2 weeks to get approval of non-profit status through the IRS for Zenith. This process normally takes close to a year, but with the push of the administration it was expedited. The entire CCi take down was an experiment by the DOE on how to collapse the for-profit education industry. A lot of people made millions on the take down including government insiders. ECMC did not invest a single dime of their money in Zenith Education Group, it was and continues to be tax dollars donated by the Department of Education.

@KuuuIKp-3upl, based on reliable confidential sources, I also think there was a quid pro quo between ECMC and ED. But I can't confirm the deal(s) without documentation. I'm not sure any of this activity would be illegal but it would be unseemly. ECMC would likely have gotten contracts anyway, although they do have a problem with harassing debtors. I have passed some of what I do know to the Everest Avengers (Corinthian Collective). I hope that someone will come forward with more concrete information.

As for the Everest sale, follow the money flow from DOE to ECMC. They keep getting billions of dollars in student loan portfolios more than making up for the losses they are incurring on the Zenith schools. Time to close the remaining Zenith schools and recall the FFelp loans that could be much more efficiently collected elsewhere. Stop thinking that ECMC is pouring money into the Everest schools because they love students. They love money a whole lot more.

The quid pro quo between DOE and ECMC is shameful.

Camden- Most if not all of what you seek can be found at EDGAR.

@KuuuIKp-1ppg, those are pretty serious allegations that should have been reported to ED and the SEC. I was aware of the rumors about * and Corinthian Colleges because he told me about the accusations some time ago. If you have any solid information, you have my email address (dahneshaulis@gmail.com). In a way, this will be a test to see if this is more than rumor or if it's just a red herring.

Camden -- the Dept of Ed continued to fund the school system for 2 reasons. 1 -- a massive shut down would have resulted in a congressional inquiry -- due to the financial negative impact the government would have taken. 2 -- a congressional inquiry would have disclosed the unfair treatment and biased approach taken by the government.

Why are these statements true -- no one has been prosecuted for the alleged fraud and abuse. If such fraud and abuse existed -- the DOE and DOJ would have made the case. When it was all said and done -- they found a handful of placements that were questionable -- less then 1%. Harris won a large sum of money that was artificial. The company was bankrupted and it did not contest her case -- the state of California got nothing except the extensive use of taxpayer dollars used to fund her campaign.

If you really want to make a difference -- start researching the sale of both Apollo and Everest. Would you not find it interesting that significant friends of the white house short sold Apollo stock, then put together a purchasing entity that purchased Apollo and then had a prior DOE employee run the school system -- that was involved in the take-down and reduction in stock price that drove the friend of the white house's ability to build his wealth through short selling.

Piss off pea brain!