Corinthian Colleges Reaches Short-Term Deal With U.S.
Career College Central summary:
Corinthian Colleges Inc. said Monday that it had reached a short-term deal with the U.S. to keep operating until the for-profit educator and regulators complete a transition plan. The stopgap measure includes $16 million in federal aid earned through enrollment, which would avert a liquidity shortfall and allow operations to continue. The funds will be available once the school provides student rosters and related information, according to a regulatory filing.
The company and the U.S. Department of Education also have agreed to complete the details of the transition by July 1, Corinthian said in a news release. Meanwhile, the two sides have agreed to allow Corinthian to continue pursuing strategic alternatives for its operations, including a sale. After July 1, Corinthian will begin a process to sell certain of its schools to one or more entities within six months. Schools that will be designated as so-called "teach-out" operations will discontinue enrollments.
The company also has agreed to appoint an independent third-party compliance monitor, who will have complete access to its personnel and budgets, including financial forecasts, results, cash receipts and disbursements. The monitor, whom the Education Department must consider acceptable, will provide documents and report on Corinthian's progress, the company said.
Last week, Corinthian warned that it may have to shut down after the Education Department restricted the company's access to federal funding over concerns about its marketing practices, including claims of falsifying data about students' job placement. The company had previously been sued by several states, as well.
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THE WALL STREET JOURNAL