Corinthian Colleges, which operates Everest, WyoTech, and Heald Colleges, recently came to an agreement with the U.S. Department of Education to sell 85 of their 107 campuses and close 12 others. All 23 of CCI’s California campuses are set to be sold.
This agreement comes after a long legal battle between the Santa Ana-based CCI and several state and federal agencies. The corporation was under a yearlong investigation for its recruitment and marketing practices, including falsifying job placement rates. In June, the U.S. Department of Education placed a 21 day hold on CCI’s access to federal student loans and grants, which makes up approximately 85% of the company’s revenue. The company had been receiving around $1.4 billion per year in federal funding through student loans.
On July 11, the Dept. of Education agreed to release $35 million to CCI under the condition that it may only be used for approved education activities, including payroll expenses, student refunds, and accounts payable. Funding cannot be used to pay dividends, legal settlements or debt repayments. Corinthian is required to hire an independent monitor to ensure funds are being used properly, and will also be required to create a reserve fund of at least $30 million for refunds to students.
Students on the closing campuses will have the option to finish their degrees through a “teach out” program sponsored by the Dept. of Education, while some will be offered refunds and the opportunity to transfer with their loans discharged. The decision is up to Corinthian, but students can appeal if they are unhappy with the decision.
A press release by CCI on this matter can be found here.