Corinthian’s Dismantling Begins
Career College Central summary:
The U.S. Department of Education and Corinthian Colleges agreed late Thursday to a plan to close or sell the for-profit provider's 107 campuses and online programs. It remained unclear which of the company's Everest, Heald and WyoTech chains will be sold. The department said it would release $35 million in financial aid to keep the cash-starved Corinthian afloat throughout the process.
The money will be used solely for educational activities, according to a statement from the department. That means student refunds and payroll expenses, not shareholder dividends or legal fees. And the feds will need to sign off on how the money is used. The company said it will put 85 of its U.S. campuses up for sale, with any deals to be completed within approximately six months. A dozen will close gradually. Its Canadian campuses are also for sale.
Corinthian, which enrolls 72,000 students, will hire a department-approved monitor to oversee the plan's execution. 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. The for-profit will also give refunds to students in a "number of circumstances," the department said. The feds and Corinthian will work together to create a reserve fund of $30 million for those refunds.
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