Corinthian Colleges

Corinthian Colleges' 2015 collapse after regulatory action demonstrated the for-profit education sector's vulnerabilities. The company operated over 100 campuses under names like Heald College, Everest College, and WyoTech, enrolling 74,000 students. When the Department of Education restricted access to federal financial aid over concerns about job placement fraud, Corinthian couldn't survive. The mechanism failure was fraudulent metrics triggering regulatory response. Corinthian had inflated job placement rates—the key metric students and regulators used to evaluate program quality. When investigators found systematic fraud in placement reporting, the company lost access to the federal aid that comprised most of its revenue. The $1.4 billion in subsequent student loan forgiveness demonstrated the scale of harm. Corinthian's closure displaced 74,000 students and destroyed shareholder value, but the company's practices had already harmed students by loading them with debt for credentials that didn't deliver promised careers. The for-profit education model—optimizing for enrollment and revenue rather than outcomes—proved unsustainable when regulators enforced outcome requirements.