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Network Corinthian five years ago had more than 100 university campuses throughout the United States and its university (Everest College, Heald College and WyoTech) attended 110 thousand. students. This listed on the stock exchange and net profit was known for offering diplomas to students from low-income families who have to learn borrow, financed in large part by the budget of the government.
But a few years ago revealed irregularities, including allegations that universities are deceiving when it comes to learning outcomes (eg skewed. statistics on the employment of graduates), as well as students tend to feed false information in applications for loans (to increase the chances of obtaining a loan), led to the collapse of the network. A week ago closed the last of the 28
campuses, and on Monday the company officially declared bankruptcy.
Students borrowed a total of $ 480 million
The immediate cause of the collapse was the decision of the ministry of education, undertaken as a result of the federal investigation, to withhold the funds for loans to students Corinthian government budget. As reported by “The Washington Post”, up to 80 percent. the annual income of the network of universities came precisely from the government. Last month, the ministry ordered the Corinthian pay a penalty of $ 30 million for various irregularities.
With the collapse of schools without diplomas remained 16 thousand. students, including many of the debts contracted for science. They are expected to apply for their redemption to the government. Earlier this year, approx. 150 former graduates Corinthian went on strike and stopped paying back loans, explaining that the government should cancel them, because they have been deceived. One of the strikers, described by the “New York Times” 36-year-old Brittany Prock, is to blame the government and the private bank of 83 thousand. USD and still has not found work in line with education.
The sum of private financing, which Corinthian enlisted students to learn (more than government loans) is estimated at $ 480 million. Bureau of Consumer Protection (Consumer Financial Protection Bureau) filed lawsuit Corinthian, accusing the company of instigating students to take out expensive loans. Sightings have been especially those from poor families who can not afford to study, and a high school degree was supposed to be a guarantee of access to the middle class and a better future.
High tuition costs in the US
The Fall of Corinthian illustrates a bigger problem in the US accounted for the high cost of science and made on its cover loans.
It is estimated that students and graduates of the debt has already exceeded $ 1.2 trillion, which is four times higher than in 2004. Some even speak of a new credit bubble growing. In total, as many as 40 million Americans have now to pay off the loan on science. This is an increase from 29 million in 2008.
According to published in last. R. Report, the College Board, the nonprofit organization that has been promoting higher education among all students who received last year bachelor’s degree , the debt was over 60 percent. – An average of 30 thousand. dollars. Average tuition for a four-year study at a public college or American university was on average 9.1 thousand. dollars, and private universities about 30 thousand.
The White House recently estimated that over the last three decades, average tuition at a public college, the US has tripled, while the middle class real wages have risen only slightly. Therefore, more and more American families are forced to take a loan to study. Entering adult life, many graduates have problems to pay them off, especially since the situation on the labor market has still not returned to the state before the last crisis.
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