Corinthian Colleges missed a deadline yesterday to reach an agreement with the Department of Education about the future of the failing for-profit college giant’s 107 campuses nationwide. A Department of Education press release this morning said the government expects to reach an agreement within the next few days.
If Corinthian and the DOE cannot reach an agreement soon, the effects could be costly for taxpayers: A filing from last week warned that the government could lose $1.2 billion in outstanding student loans if Corinthian went bankrupt. Corinthian’s 72,000 students, meanwhile, would likely not be able to complete their degree programs at the college’s chains, which include Everest College, Heald, and Wyotech.
Corinthian has been close to collapse since the DOE froze its access to federal loan funding on June 18, leading the cash-strapped company to warn it would go bankrupt within days. The DOE eventually struck a preliminary agreement, freeing $16 million in funding to prevent Corinthian from shutting down immediately, but only with an understanding that the company would eventually outline a detailed plan to sell or wind-down all of its campuses.
Corinthian would be the first publicly traded for-profit college to shut down after years of regulatory and legal troubles since the Obama administration began targeting large for-profit colleges.