For-Profit Corinthian Colleges Shuts Down All Remaining Campuses

For-profit college giant Corinthian Colleges abruptly announced Sunday it will immediately close its remaining 28 campuses, a move that will affect roughly 16,000 students.

The closure – effective Monday – comes on the heels of a hefty $30 million fine the Department of Education levied against the company for publicizing falsified data that were misleading to students. Corinthian said in a statement it is trying to make arrangements for students to continue their studies elsewhere.

The troubled for-profit chain – which operates Heald College, Everest College and WyoTech campuses – has been mired in controversy and on the brink of a complete shutdown since June, when the Department of Education placed Corinthian Colleges on an increased level of financial oversight after the company falsified job placement data it used in marketing to recruit students and allegedly altered grades and attendance records. In July, the company came to an agreement with the department to either sell or close all of its campuses over a six month period, to avoid a sudden closure for the 72,000 students who at the time attended Corinthian schools.

In a statement, the company said it had been in "advanced negotiations" to sell Heald College – which has locations in California, Hawaii and Oregon – and to arrange for a teach-out agreement so students at Everest College and WyoTech could continue their education.

Corinthian said in the statement that the negotiations were unsuccessful "largely as a result of federal and state regulators seeking to impose financial penalties and conditions on buyers and teach-out partners."

"We believe that we have attempted to do everything within our power to provide a quality education and an opportunity for a better future for our students," said Jack Massimino, CEO of Corinthian, 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. I would like to thank our employees for their selfless dedication and commitment to fulfilling the educational and career goals of all of our students." 

One looming question is who will pick up the bill for the thousands of students now unable to repay their federal student loans. Students at schools that have closed are eligible to have their loans discharged, which means the Department of Education could be left with settling tens of millions of dollars in loan payments with taxpayer money, unless it gets sufficient funds from Corinthian.

Education Secretary Arne Duncan last week told reporters in Chicago that "everything is on the table" for former Corinthian students seeking financial relief.

Ted Mitchel, under secretary of education, wrote in a blog post that the department plans to send staff from its Federal Student Aid team to as many Corinthian campuses as possible to speak with students, and that department officials are working with community colleges "to ensure that students have options to continue their education."   

"As Corinthian closes its doors for good, the Department will continue to keep students at the heart of every decision we make and will communicate with Corinthian students about all their options going forward," Mitchell wrote. "What these students have experienced is unacceptable and we look forward to working with Congress in an effort to improve accountability and transparency in the career college industry."