Feds and Corinthian Agree on Plan to Sell 95 Campuses

The U.S. Department of Education and Corinthian Colleges Inc. agreed late Thursday to a plan to close or sell the for-profit provider's 107 campuses and online programs, reports The Chronicle of Higher Education.

The agreement comes two weeks after the department heightened its financial oversight of Corinthian and withheld financial aid payments, exacerbating a cash-flow crisis for the company that it said would threaten its very existence. Days later, Corinthian and the department announced an agreement for the company to sell or wind down operations on all of its campuses over the next six months under a plan that was expected by July 1 but that took until late Thursday to be finalized.

The department said it had taken the action "after the company failed to provide records concerning enrollment and job-placement data required by federal law, and failed to fully address concerns about its practices, including faulty job-placement data used in marketing claims to prospective students and allegations of altered grades and attendance."

Under the finalized agreement, the department said it would release $35 million in financial aid to keep the cash-starved company afloat throughout the process. The money will be used solely for educational activities, according to a statement from the department, meaning student refunds and payroll expenses, not shareholder dividends or legal fees.

Corinthian released further details on the campuses it will sell in a corporate filing on Monday: Everest has 69 colleges and institutes for sale, Heald has 12 colleges and institutes for sale, and WyoTech has four colleges and institutes for sale. Separately, the for-profit chain will sell its 10 campuses in Canada.

Corinthian will gradually close its remaining 12 campuses in the United States. The company agreed to tell all students at campuses that are being closed about a "teach out" option, giving them the choice to complete their studies.

Additionally, Corinthian will hire a department-approved monitor to oversee the plan's execution.

 

Related Links

The Chronicle of Higher Education

http://chronicle.com/article/Corinthian-to-Sell-95-of-Its/147503

Corinthian College Inc. Corporate Filing

http://investors.cci.edu/secfiling.cfm?filingid=1104659-14-50216&CIK=1066134

Inside Higher Ed

http://www.insidehighered.com/news/2014/07/07/feds-and-corinthian-agree-plan-profits-closure-questions-remain#sthash.O3UPShX8.qgSaAM0n.dpbs