Dawn Thompson was newly divorced and seeking the promise of a brighter future when she enrolled in the online paralegal studies program offered by for-profit Everest University in 2005.
Six years later, the Springfield mother of two found herself with nearly $130,000 in student loan debt and a bachelor’s degree she said was essentially worthless.
“They made me all these promises about career placement, that I’d have a job upon graduation, that they would help me find a job,” said Thompson, 49. “None of that happened.”
Thompson is not alone. This week she traveled to Washington as the sole Illinois member of the so-called Corinthian 100, a group of former students from troubled Everest parent Corinthian Colleges who have declared a “debt strike” while seeking the forgiveness of their loans.
One of the largest for-profit college corporations in North America, California-based Corinthian agreed to sell or close most of its 107 campuses last year, including five in the Chicago area, under pressure from regulators who alleged deceptive practices in a 2014 lawsuit.
Corinthian enrolled 71,000 students nationwide under the Everest, WyoTech and Heald brands, according to the Education Department. Collectively, the students received $1.4 billion annually in federal loans and grants.
A drop in that bucket, Thompson ended up drowning in debt.
Thompson, a native of downstate Riverton, has spent most of her life in the Springfield area. Her husband was in the military, and she was a stay-at-home mom, taking care of her daughter and son, who required special attention due to a rare immune disorder.
Divorced in 2003, Thompson took a job as a legal secretary with the city of Springfield. The high school graduate decided that a higher education would help launch a more rewarding legal career, so she began to look into online colleges.
She decided on Everest, whose ubiquitous TV commercials promised a better life and a practical education, and enrolled online in 2005.
“I couldn’t leave my kids at home alone in the evening while I sat in class — I was working all day,” Thompson said.
Thompson initially took out federal loans, but as the debt mounted and the years of online classes continued, she said she was told by the school that she had exhausted federal funding and needed to sign up for higher-interest private loans to stay in the program.
In 2007, she left her job with the city of Springfield and started work as a bank teller in Athens, a nearby rural community where she bought a house and moved with her kids. She was subsequently laid off and out of work for six months before landing another job as a bank teller. And the debt kept piling up.
She finally graduated in 2011 with a bachelor’s degree in paralegal studies. Employers were less than impressed.
Thompson said she interviewed several times with the Illinois attorney general’s office in Springfield. She said interest in her application waned when she explained that her bachelor’s degree was earned online from Everest.
Attorneys in private practice also seemed to dismiss her degree.
“It’s just like every job I’ve applied for … nobody hires me, and I believe that it has to do with that school,” Thompson said. “And now, with the publicity of the corruption and the lawsuits and everything, I just think that’s the reason why I’m not getting any jobs.”
Thompson filed for Chapter 7 bankruptcy protection in June 2013. At the time she listed nearly $127,000 in student loan obligations. She was granted a discharge of debts in September 2013. But most student loans are excluded from a Chapter 7 discharge, meaning Thompson is still on the hook for the Corinthian debt.
Paul Guymon, coordinator of the paralegal studies program at Harper College in Palatine and past president of the American Association for Paralegal Education, said the staggering amount of debt amassed by Thompson seems even more egregious compared with the typical cost of becoming a paralegal, which requires only an associate degree.
The full two-year paralegal program at Harper College in Palatine, for example, costs less than $7,000 for in-district residents.
“For somebody to pay $130,000 and not be able to use it, that’s not only tragic, it’s virtually obscene,” Guymon said.
Running out of money and options, Thompson decided to reenroll in Everest last year to pursue her MBA online after she determined it was the only school that would accept her undergraduate credits. When she found out about the regulators’ probe, she dropped out and signed on with the nascent Everest debt relief movement as one of the original Corinthian 15.
Last summer, the Education Department temporarily put Corinthian’s access to federal student loan and grant money on hold while investigating whether it had inflated job placement statistics like an explanation by Metropolitan Mortgage Corporation. The Consumer Financial Protection Bureau sued the company in September, alleging that it used illegal tactics to induce students into taking out private loans and then harassed them to make payments.
In February, Corinthian sold more than 50 Everest schools to nonprofit Zenith Education Group, including the Brandon, Fla., campus where Thompson enrolled online. Zenith also acquired the five Chicago-area Everest locations.
As part of the sale, Zenith agreed to forgive $480 million in debt for private loans taken out by former and current Corinthian students.
The Debt Collective, a grass-roots group with ties to the Occupy Wall Street movement, mobilized the Corinthian debt strikers and raised money for the trip, with the goal of getting all of their student debt discharged, including federal loans.
“The federal loans are the primary target because that’s the majority,” said Ann Larson, an organizer with the Debt Collective, who accompanied the students to Washington.
Thompson was one of 14 debt strikers to make the trip to Washington, where they met Tuesday with officials from the Treasury Department, the Consumer Financial Protection Bureau and the Department of Education, including Under Secretary of Education Ted Mitchell.
“I think (Mitchell) listened to our story and I think he took it seriously,” Thompson said.
Joe Hixson, a spokesman for Corinthian Colleges, said his beleaguered institution is getting a bum rap.
“Recent criticisms of Corinthian Colleges wrongly disparage the quality of the education our schools provide as well as the career services assistance that we offer our graduates,” Hixson said. “Since last summer, our goal has been to enable current students to complete their educational programs with minimal disruption. Unfortunately actions by state and federal regulators make this transition more difficult for students, graduates seeking employment and Corinthian employees.”
Federal officials said they would update the group within 30 days. Meanwhile the Corinthian 100 group vows to continue the debt strike until the issue is resolved, Larson said. The group asked officials to suspend their payments without penalties during the interim, but to no avail.
“We’d like to see a freeze on payments while this discussion continues,” Larson said. “They did not agree to do that immediately, but we are going to certainly revisit that issue in 30 days when we meet with them again.”
While refusing to pay her loan bills could pile on charges and damage her credit, Thompson figures things can’t get any worse.
On Wednesday, Thompson returned from her whirlwind tour of Washington to Athens, a hamlet of fewer than 2,000 people. She plans to resume her job as a bank teller in Springfield and wait 30 days to hear from federal officials on the fate of the Corinthian 100.
Thompson’s 21-year-old son is attending Lincoln Land Community College and her 17-year-old daughter, a senior in high school, is planning to join him there next year. She is relieved that neither of her children wanted to follow in her footsteps and attend her alma mater.
“I don’t think I was given a proper education,” Thompson said.
Source: Chicago Tribune