July 4 Corinthian Colleges Inc said late on Thursday that it had reached a deal with the U.S. Department of Education to sell most of its 107 campuses and wind down others, underscoring some of the struggles facing for-profit colleges across the country.
Corinthian will put 85 of its U.S. schools up for sale and will "teach out," or gradually wind down, operations at 12 others, it said in a statement.
Separately, the company will begin a sales process for its Canadian schools
The Santa Ana, California-based company has 107 campuses and online programs.
Corinthian has been scrambling for cash since it breached some debt covenants earlier this year. Last month the company said it was receiving $16 million in federal aid from the Department of Education.
The company's shares have sunk about 84 percent so far this year as worries have swirled about the schools' future. The shares on Thursday closed at 28 cents, putting its market capitalization at $24.9 million.
"This agreement allows our students to continue their education and helps minimize the personal and financial issues that affect our 12,000 employees and their families," Jack Massimino, Corinthian's chairman and chief executive officer, said in a statement.
"It also provides a blueprint for allowing most of our campuses to continue serving their students and communities under new ownership," he said.
Corinthian said last month its ability to continue to be in business was in jeopardy after the U.S. Department of Education extended the waiting period to draw down federal student aid funds.
Increased regulation has added to the woes of for-profit education companies such as Apollo Education Group and Strayer Education Inc, which have struggled to attract students since a 2010 government crackdown revealed high student debt loads, low graduation rates and poor employability of graduates. (Reporting by Luciana Lopez; Editing by Leslie Adler)