More Time For Corinthian
Career College Central summary:
The U.S. Department of Education apparently has revised its July 1 deadline to reach an agreement with Corinthian Colleges on a plan to sell or close the for-profit chain's 107 campuses and online programs.
Corinthian is facing a severe cash crisis, due in part to a freeze the department last month put on the company's federal aid payments. Then, on June 23, the feds and Corinthian announced a short-term deal, through which the company received $16 million in released payments in exchange for agreeing to work on a phasing-out plan. However, an announcement on the department's website about that preliminary agreement has now been edited, having dropped "no later than July 1" for the final plan's deadline.
"Corinthian is expected to submit details of the plan to the U.S. Department of Education," the statement now says, "and we will update this announcement with the details of the plan in the near future."
The new ambiguity about Corinthian's fate is certain to draw criticism from consumer advocates, California's attorney general and a dozen Democratic U.S. senators, who have called for a halt to the company's recruitment and enrollment of new students. The department, however, has said it is seeking to minimize disruption to Corinthian's 72,000 students. The for-profit said it would struggle to find buyers if new enrollments are suspended. In addition, the federal government could lose as much as $1.2 billion on students' discharged loans if Corinthian shuts down.
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