THE CONSUMERIST: Corinthian Colleges Inc. Files For Bankruptcy

Career College Central Summary:

  • A week after embattled for-profit college chain Corinthian Colleges Inc. closed its remaining Everest University, Heald College and WyoTech campuses, the company filed for bankruptcy, essentially closing the book on the company’s long downward spiral. 
  • The Wall Street Journal reports that CCI filed for Chapter 11 protection in U.S. Bankruptcy Court in Delaware on Monday, listing assets of $19.2 million and debt of $143.1 million.
  • CCI’s prolonged collapse began last July when it entered into an agreement with the Department of Education to sell or close a majority of its campuses. Prior to the agreement CCI enrolled 72,000 students and received $1.4 billion in federal student aid.
  • Since that time, Corinthian completed the sale of some 56 campuses to Education Credit Management Corporation in early February. In order to close that deal, ECMC agreed to provide $480 million in forgiveness for current and former students who took out CCI’s high-cost private student loans.
  • Last week CCI published a notification on its website declaring it would cease all operations and discontinue instruction at its remaining 28 campuses effective April 27.
  • Officials with CCI say that the company has been part of advanced negotiations to sell its Heald College branch and to arrange teach-out programs that would allow its Everest College and WyoTech students in California to continue their education.
  • However, the company says those efforts proved to be unsuccessful because of a number of state and federal investigations into the college chain. Ultimately it was determined the only option was closing the remaining campuses.
  • Corinthian’s decision to file for bankruptcy comes after a sting of recent issues for the company.

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