For-profit Corinthian Colleges to shut down remaining campuses

SANTA ANA, Calif. — For-profit college operator Corinthian Colleges Inc. said it will immediately shut down all its remaining campuses and cease substantially all other operations.

It is working to find other schools for the roughly 16,000 students affected by the shutdown, the company said in a statement Sunday.

The Santa Ana, Calif.based company had been subject to multiple federal and state probes into whether it misled investors and students about its finances and job placement rates.

It agreed with the U.S. Department of Education last year to sell or close down its campuses.

Earlier this month, the U.S. Department of Education fined Corinthian Colleges $30 million for misrepresenting job placement rates to students in its Heald College system. The government determined that Corinthian’s Heald College would no longer be allowed to enroll students.

U.S. Education UnderSecretary Ted Mitchell said the department’s workers will begin reaching out to Corinthian’s students to review their options, including the possibility of loan discharges.

“What these students have experienced is unacceptable,” Mr. Mitchell said in a statement. “As Corinthian closes its doors for good, the department will continue to keep students at the heart of every decision we make.”

Corinthian sold off more than half of its 107 campuses to nonprofit education provider Education Credit Management Corp. late last year.

It said the campuses that are closing include 13 remaining Everest and WyoTech campuses in California, as well as Heald College.

Corinthian’s California schools weren’t part of the sale to Education Management, because the state’s Attorney General Kamala Harris refused to sign off, preferring to pursue restitution for students.

The schools, mainly located in strip malls and office parks, had 72,000 students last summer, before the Education Department actions. Corinthian received $1.4 billion in federal student aid in 2013 alone.

Corinthian CEO Jack Massimino said “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.”

Increased regulation has impacted for-profit education companies such as Corinthian, Apollo Education Group Inc. and Strayer Education Inc., which have struggled to attract students since a 2010 government crackdown revealed high student debt loads, low graduation rates and poor employability of graduates.