Business

For-Profit Corinthian Colleges Goes Out Of Business

Some 16,000 students at Everest Colleges and other schools will be affected.

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Corinthian Colleges, the embattled for-profit college company, announced Sunday that it is ceasing operations, immediately shuttering all of its 28 remaining campuses. The abrupt closure is unprecedented in size: on Monday, some 16,000 students at Corinthian's Everest, Heald, and Wyotech College chains, most of them in California, will have no school to attend.

Those thousands of current students may now be eligible to have their loans discharged, an option the Department of Education provides to students whose schools abruptly close down.

The Department of Education made an unprecedented move to shut down the massive for-profit college chain last July in the face of a slew of investigations and lawsuits that alleged misleading practices and predatory lending schemes. BuzzFeed News reported last year on how Corinthian trapped students in deepening poverty.

But no for-profit college nearly as large had ever been forced out of business before Sunday.

In November, Corinthian sold off the majority of its campuses to ECMC Group, a nonprofit. But the company struggled to find a buyer for its schools in California, where an open lawsuit by the attorney general there, Kamala D. Harris, appeared to stand in the way of a sale.

ECMC said it tried to buy Corinthian's California campuses but backed out because of concerns it might be held liable in the attorney general's suit. Earlier this month, two sources with knowledge of the situation told BuzzFeed News that several other buyers had expressed interest in the California campuses, but were unable to negotiate with the Harris' office.

Two weeks ago, the Department of Education slammed Corinthian's Heald College chain with a $30 million fine, the largest of any it had imposed on a for-profit school, saying that the company had lied to a decade's worth of students about their chances of getting jobs. Many observers considered the fine a death knell for the company, which had so little cash in its coffers that it was selling off schools' automotive equipment to stay afloat.

In a statement on its website, Corinthian said efforts to sell of its remaining campuses "were unsuccessful largely as a result of federal and state regulators seeking to impose financial penalties and conditions on buyers and teach-out partners."

The company said in its statement that it was "working with other schools" to find a way for students to continue their educations, though it is unclear whether that will be possible for such a large number of students. Everest's credits are historically not transferrable to the vast majority of schools, including state and community colleges.

"You should be proud of the fact that you did a good job for our students," Corinthian CEO Jack Massimino said in an internal email to the company's remaining employees. "It was disappointing that we were never given the due process to refute the unsubstantiated allegations against the company. But you helped us go out the right way – focusing on helping our students find the best possible outcome."

Molly Hensley-Clancy is a business reporter for BuzzFeed News and is based in New York. She covers the intersection of business and education.

Contact Molly Hensley-Clancy at molly.hensley-clancy@buzzfeed.com.

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