Corinthian Colleges Inc., the troubled Orange County for-profit college operator, announced Sunday that it will end operations and close its remaining schools, affecting more than 16,000 students in California and other states.
In the wake of state and federal investigations into its job-placement practices, Corinthian had already sold the majority of its schools to a nonprofit student loan servicer last fall. But the company had still been seeking a buyer for more than two dozen campuses in California and other western states.
Corinthian said in a news release Sunday that it has had trouble selling the remaining campuses because federal and state authorities were "seeking to impose financial penalties and conditions" that would affect potential buyers.
Sunday's announcement by Corinthian will be effective Monday at its 13 remaining Everest College and WyoTech campuses in California, along with 10 Heald College campuses in California, Hawaii and Oregon. Other campuses that will close include Everest College Phoenix, Everest College Tempe and Everest Institute in Rochester, N.Y.
The company said in a news release that it would work with other schools to provide "continuing educational opportunities" for the remaining students.
"Unfortunately the current regulatory environment would not allow us to complete a transaction with several interested parties that would have allowed for a seamless transition for our students," Corinthian Chief Executive Jack Massimino said in a statement.
In an email to remaining employees, Massimino wrote: "We had worked very hard for a better outcome that would have allowed many of you to continue working under new ownership. Unfortunately, we were unable to achieve that goal and effective today your position will be eliminated."
Students attending a school that shuts down suddenly, as in this case, are typically eligible for a full discharge of student loan debt.
Other Corinthian students have pushed for the Department of Education to discharge loans for all current and former Corinthian students, citing multiple investigations and lawsuits from state attorneys general alleging fraudulent job placement and marketing techniques.
The company has been in financial turmoil since last summer, when the U.S. Department of Education restricted Corinthian's access to federal student aid, amid concerns that the company had falsified the job placement rates it advertised for its graduates.