Embattled for-profit Corinthian Colleges Inc. announced Sunday that it will cease operations and close all remaining campuses starting Monday.
The move will displace around 16,000 students currently attending one of its remaining 28 campuses, which are located in California, Hawaii, Oregon, Arizona, and New York.
Corinthian had already sold half of its campuses to a credit management firm
In its statement, Corinthian blamed federal and state regulation for the closure, saying "financial penalties and conditions on buyers and teach-out partners" blocked possible sales of the campuses.
Corinthian's announcement comes shortly after the Department of Education levied a $29.7 million fine on the company's Heald College system for allegedly inflating the job-placement statistics of graduates. On top of that, the Bureau for Private Postsecondary Education last week ordered Corinthian to stop enrolling new students at two locations in California.
Jack D. Massimino, CEO of Corinthian, says the company's leaders "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." The company also says it is negotiating with other institutions to help students transfer.
"This has really exposed the shortcomings of federal and state oversight, and the accreditation system," says Pauline Abernathy, VP of the Institute for College Access & Success, an advocacy group that has lobbied for stronger regulation of for-profit institutions. "The fact that a school could be allowed to get so big and so reliant on taxpayer funding—and to harm so many students without action being taken sooner—really exposes the need to reform the system at all levels."
Ted Mitchell, undersecretary of education, wrote a blog post Sunday explaining that the department is considering loan discharges for the displaced students, which is traditional for students attending a school that closes mid-semester. The federal government has already forgiven $480 million in student loans for some Corinthian students.
Mitchell added that what Corinthian students have experienced "is unacceptable" and that he and other leaders plan to work with Congress "to improve accountability and transparency in the career-college industry."
"A lot of us are devastated," one student told the Los Angeles Times. "The last two and a half years I spent going to that school—the trouble, the time, the money I spent on gas—I feel like it was a waste of time," said another.
In spite of the closure announcement, Corinthian has not yet filed for bankruptcy as of Monday morning (Kyle, Orange County Register, 4/21; Huckabee, The Chronicle of Higher Education, 4/27; Kirkham, Los Angeles Times, 4/26).
Next in Today's Briefing
Why some universities are bidding adieu to academic medical centers