A week after embattled for-profit college chain Corinthian Colleges Inc. closed its remaining Everest University, Heald College and WyoTech campuses, the company filed for bankruptcy, essentially closing the book on the company’s long downward spiral.
The Wall Street Journal reports that CCI filed for Chapter 11 protection in U.S. Bankruptcy Court in Delaware on Monday, listing assets of $19.2 million and debt of $143.1 million.
CCI’s prolonged collapse began last July when it entered into an agreement with the Department of Education to sell or close a majority of its campuses. Prior to the agreement CCI enrolled 72,000 students and received $1.4 billion in federal student aid.
Since that time, Corinthian completed the sale of some 56 campuses to Education Credit Management Corporation in early February. In order to close that deal, ECMC agreed to provide $480 million in forgiveness for current and former students who took out CCI’s high-cost private student loans.
Last week CCI published a notification on its website declaring it would cease all operations and discontinue instruction at its remaining 28 campuses effective April 27.
Officials with CCI say that the company has been part of advanced negotiations to sell its Heald College branch and to arrange teach-out programs that would allow its Everest College and WyoTech students in California to continue their education.
However, the company says those efforts proved to be unsuccessful because of a number of state and federal investigations into the college chain. Ultimately it was determined the only option was closing the remaining campuses.
Corinthian’s decision to file for bankruptcy comes after a sting of recent issues for the company.
Two weeks ago, California Department of Consumer Affairs announced it issued an Emergency Decision demanding that CCI stop new enrollments at several California campuses.
The Bureau issued the order after determining that the CCI schools did not meet the minimum state standards for financial resources. Among the findings was the confirmation that Everest and WyoTech failed to provide the Bureau with current financial statements as part of their annual reports.
Additionally, inspections of the two schools found they were unable to produce the required financial statements after repeated requests by the Bureau.
Before that the Dept. of Education imposed a $30 million fine against CCI over the use of misstated and inaccurate job placement rates to recruit students at its Heald College campuses. As part of that order, the company was required to stop enrollment at Heald campuses nationwide.
Other issues the company has faced include being delisted from Nasdaq and notice from the California Student Aid Commission that it would halt grants to CCI students. Both of those moves came after the company failed to submit required financial statements to both the Securities and Exchange Commission and the student aid commission.
CCI’s obstacles haven’t just been relegated to the U.S.: the company’s Canadian operations closed with little warning to students and filed for bankruptcy in February.
Corinthian Colleges files for chapter 11 bankruptcy [The Wall Street Journal]
by Ashlee Kieler via Consumerist
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