Corinthian Colleges Inc., the troubled for-profit college corporation, announced it will sell off the vast majority of its campuses over the next six months amid heightened scrutiny from the federal government.
As part of an agreement late Thursday with the U.S. Department of Education, Santa Ana-based Corinthian will sell 85 of its campuses and wind down operations at 12 others. The company operates in 25 states under the names Everest College, Heald College and Wyotech.
Corinthian will announce the specific schools to be sold on Monday.
The agreement marks the latest step in an ongoing drama for Corinthian, which has recently faced major restrictions on its access to federal student aid, the source of nearly 85% of its revenue. Over the last year the Department of Education, the U.S. Consumer Financial Protection Bureau and attorneys general in more than a dozen states have been investigating whether Corinthian falsified job placement rates and student attendance records.
Unhappy with the information Corinthian was providing, the Education Department last month put a 21-day hold on Corinthian's access to federal student loan and grant money. Faced with a severe cash shortfall, Corinthian told investors it might have to shut down.
Over the last two weeks Corinthian and the Department of Education have been working out a transition plan to avoid a total shutdown of the company's schools.
Under Thursday's agreement, the Education Department will provide $35 million in student aid funding, but the company's finances will be tightly controlled by an independent monitor.
The company also must stop enrolling students at the 12 schools it eventually plans to close. Students currently enrolled at those campuses will be able to finish their degrees or be eligible for a full refund, but that decision is up to Corinthian.
Students unhappy with the decision can appeal.
Those who enrolled during the last two weeks at one of the 12 schools have the choice of a full refund.
Corinthian executive Jack Massimino said in a statement that the agreement provides a "blueprint for allowing most of our campuses to continue serving their students and communities under new ownership."
But many students at Corinthian schools say they haven't received clear information from the company in recent weeks.
Hope Pryor, who lives in the Houston area and attends Everest University online, has been trying nonstop for a week to get answers about financial aid and transferring credits.
Given the choice, Pryor said she would much rather get a refund and start over elsewhere.