Current students at the closing Everest Institute in Chelsea may be eligible for a refund, which would include a discharge of their existing student debt. However, only students who enrolled after June 23 will immediately see that option.
Everest in Chelsea is one of 12 campuses that will be closed by for-profit higher ed organization Corinthian Colleges. Corinthian will sell 85 of its other campuses, it was announced last week. Corinthian agreed to do so after the U.S. Department of Education put a freeze on student aid flowing into the company, because the company had failed to provide information on job placement, attendance, and grade changes of students.
The Chelsea campus will offer a teach-out, allowing enrolled students to finish up their studies. Under the terms of the company’s agreement with the education department, Corinthian will give students who enrolled at teach-out schools after June 23 the opportunity to get a full refund.
The agreement also says Corinthian can put students who enrolled after that date into one of two plans: one in which they continue their education or one in which they withdraw. Corinthian spokesperson Kent Jenkins told Boston.com that Everest’s Chelsea students who enrolled before June 23 will be put into the continuance program.
For those students, the agreement also includes an appeals provision, which would be heard by a monitor appointed by the education department, for students who are given the plan to finish up their degrees and would prefer to withdraw and receive a refund. BostInno points out that some students on social media are questioning the value of completing a degree at a soon-to-be closed school. Jenkins says the degrees will still carry the same weight they otherwise would have, because the schools remain accredited.
A full refund would help students recoup federal loans, money paid directly by the student, and higher-risk private student loans, the last of which Corinthian students have a history of carrying, and which Massachusetts Attorney General Martha Coakley and the Consumer Financial Protection Bureau, among others, have alleged the company actively promoted.
Corinthian and the education department are establishing a reserve of $30 million to make refunds to eligible students. Federal loans will be repaid to the government, and private loans to their lenders. Students at Corinthian schools that will not have a teach-out program can also receive a refund.
More than 300 students attend the Everest Institute in Chelsea, according to multiple education databases. Jenkins said most students there are enrolled in one-year degree programs.
Corinthian also has another Boston-area campus in Brighton. That Everest Institute began preparing to close prior to the education department agreement, according to Jenkins. Since it has not accepted new students for months, it does not have students enrolled after June 23 to whom to offer refunds.
Corinthian is probably the most notable for-profit higher education company to face intense government scrutiny thus far. As The Wall Street Journal notes:
The Obama administration is expected to complete tough new rules by this fall that would cut off federal aid for for-profit schools whose students default on federal loans at high rates or who end up deeply in debt. Meanwhile, for-profit education companies face federal and state probes into marketing, accreditation and lending practices.