Troubled for-profit Corinthian Colleges, the target of a recent U.S. Department of Education $30 million fine, announced Sunday it is shutting down and discontinuing instruction at its remaining 28 ground campuses after failing to find buyers, an action that leaves up to 16,000 students in the lurch and in debt.
The closure potentially will cost the U.S. government tens of millions of dollars in foregone federal student loan payments.
“Students at schools that have closed may be eligible for closed-school loan discharges; students who were enrolled at Corinthian in the last 120 days will receive information about their options from the Department and from loan servicers,” said Ted Mitchell, Under Secretary of Education, in a blog post on the U.S. Education Department’s website.
At one time, Corinthian was one of the nation’s largest chains of for-profit colleges. Following Sunday’s announcement, campuses closing include Corinthian’s 13 remaining Everest and WyoTech campuses in California, Everest College Phoenix and Everest Online Tempe in Arizona, the Everest Institute in New York, and 150-year-old Heald College—including its 10 locations in California, one in Hawaii and one in Oregon.
Jack Massimino, Chief Executive Officer of Corinthian, said in a statement: “Unfortunately the current regulatory environment would not allow us to complete a transaction with several interested parties that would have allowed for a seamless transition for our students.”
The decision to shut down was made by Corinthian after its failure to find a buyer for the remaining campuses “willing to abide by conditions put in place by the Department to protect students, borrowers and taxpayers,” said Under Secretary Mitchell.
The U.S. Education Department took action in June 2014 against Corinthian when it failed to respond to the the government’s repeated requests for answers about questionable practices, including concerns that Corinthian was using false and misleading job placement data to market its schools and recruit students. Education officials also charged that Corinthian were changing student grade and attendance data to hide performance problems.
The Education Department intensified oversight of Corinthian, leading to an agreement that put Corinthian on the road to closure. As first step in that process, Corinthian sold 56 Everest and WyoTech brand campuses in November 2014.
On April 14, the Department released findings regarding Corinthian’s Heald campuses. “Corinthian’s misrepresentations regarding placement rates were serious, and the Department initiated a fine action of approximately $30 million against the school,” Mitchell said.
At the time the Education Department first took action against Corinthian, about 72,000 students were enrolled.