WASHINGTON POST: How dozens of failing for-profit schools found an unlikely savior

Career College Central Summary:

  • It was once among the country’s most successful public companies, beloved by Wall Street for its simple, lucrative model: offering degrees to low-income students who borrowed heavily from the government to pay their tuition.
  • But the for-profit college giant Corinthian Colleges has spent much of the year in a tailspin. Investigations found the school used deceptive marketing to lure students into loans they had no hope of paying back, and the federal government suspended the schools’ access to federal aid.
  • Corinthian’s schools looked like they were toast. And then an unlikely savior swooped in.
  • The ECMC Group, which runs one of the biggest debt collectors used by the Education Department and has no experience teaching students, agreed last week to pay $24 million for more than half of Corinthian’s 107 campuses. The company plans to turn the for-profit campuses into nonprofit schools serving nearly 40,000 students.
  • The deal will create the country’s largest nonprofit system of career education and is the biggest sign yet that the beleaguered for-profit college industry, which currently has 2 million students enrolled, is trying to reinvent itself. Several other for-profit schools are also trying to turn into nonprofit institutions.
  • Critics say the Corinthian deal, which is unprecedented in scope, could put more taxpayer dollars and students at risk at a time when there is already $1 trillion in federal student debt.
  • “I find it ironic that a company whose history is in student debt collection is now going to run a set of colleges that excelled at sending students into default,” said Ben Miller, a senior policy analyst at the New America Foundation.

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WASHINGTON POST

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