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
The Santa Ana, California-based company has 107 campuses and
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
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
(Reporting by Luciana Lopez; Editing by Leslie Adler)