Trouble remains following failed for-profit schools' revival

WASHINGTON (AP) — Significant problems remain at a formerly for-profit college that the Obama administration rescued from near collapse, an Associated Press review has found, despite new federal oversight and pledges of a turnaround by the schools' current nonprofit owner.

Allegations of fraud and mismanagement nearly felled school before the Education Department helped transfer Everest and a sister institution to Zenith Education Group, a nonprofit affiliate of a student-loan debt collection firm.

Zenith pledged to transform Everest, ending the school's habit of admitting "anyone with a pulse" and churning out unprepared graduates deeply in debt.

Recent graduates told the AP they are struggling to find work that would allow them to pay back their student loans, raising the prospect that the government is seeding a new crop of loan defaults.

Despite Zenith's acknowledgement of Corinthian's past misconduct, many senior Corinthian academic, financial aid and legal officials have stayed on.

Instead of having an independent and unpaid board of directors, Zenith shares its board with its parent company, Education Credit Management Corp., and pays its board members as much as $142,000 a year for a job that requires fewer than 20 hours each week.