For-Profit Corinthian Colleges To Sell Off Campuses, Phase-Out Programs

The woman shouting about Everest from a bridge is one of the more well-known ads that CCI uses to pitch its schools during daytime TV programming.

Corinthian Colleges, the company that operates for-profit education chains like WyoTech, Everest, Heald Colleges, and others has been the subject of both state and federal investigations that have kept it from opening up any new campuses. Today, Corinthian announced it’s working on a deal with the U.S. Dept. of Education that would keep its schools operating while it sells off a number of campuses and phases out others.

There are between 70,000 and 80,000 students enrolled at the various Corinthian schools around the country. Additionally, the company employs approximately 12,000 people. Rather than have the business collapse and leave all these students without classes and thousands of people jobless, Corinthian and the Dept. of Ed. folks have agreed that the company must develop a plan to sell some of its campuses and phase out programs over the next six months.

A federally approved independent monitor will oversee the company’s finances and the sales of the relevant properties.

If Corinthian comes up with this plan and agrees to the government’s terms, the Dept. of Ed. will release $16 million worth of federal student aid to students currently enrolled at Corinthian campuses… provided the school proves that all the people getting aid are actually enrolled at a Corinthian program.

Corinthian, which operates more than 100 campuses around the country and charges upwards of $40,000 a year in tuition to full-time students, has been heavily scrutinized for allegations of falsified job placement and other questionable practices.

Last fall, the California Attorney General sued CCI of knowingly inflating job placement stats to both applicants and to investors. The state also accused CCI of illegally using military seals in its ads to lure in members of the armed services.

Then in February of this year, CCI revealed that it was under investigation from the Dept. of Education for claims that it had falsified info about placement, attendance and/or grade information, and by the Consumer Financial Protection Bureau regarding the legality of its student loan practices.

The Dept. of Ed. says that it put CCI on heightened financial monitoring on June 12, which means a 21-day hold on federal funds. The company gets around $1.4 billion in student aid from the federal government every year.

The heightened financial monitoring remains in effect while CCI turns over the data that regulators have been requesting since the beginning of the years. This is not a settlement deal and does not put an end to federal and state regulations.

“Students and their interests have been at the heart of every decision the Department has made regarding Corinthian,” said U.S. Under Secretary of Education Ted Mitchell. “We will continue to closely monitor the teach-out or sale of Corinthian’s campuses to ensure that students are able to finish their education without interruption and that employees experience minimal disruption to their lives. The Department is committed to ensuring all students receive a quality education that leads to a well-paying job and a strong future.”

by Chris Morran via Consumerist