For-Profit Colleges Update: Corinthian To Close All Campuses Monday, Affecting 16,000 Students

RTR4TKNT — U.S. President Barack Obama talks to the media next to Secretary of Education Arne Duncan (left) last month. The education department has previously taken aim at the the for-profit college system Corinthian Colleges Inc., which will close all its campuses Monday. Reuters

Corinthian Colleges Inc., once one of the biggest for-profit education companies in the United States, is closing its remaining 28 colleges, affecting 16,000 students. The corporation announced Sunday it will cease operations Monday.

"We believe that we have attempted to do everything within our power to provide a quality education and an opportunity for a better future for our students," CEO Jack Massimino said in a statement on the corporation's website.

Corinthian has been under federal investigation for the past few years for misleading students. Government officials have accused the company of faking job placement rates, recruiting prospective students too aggressively and issuing predatory loans. One group of alumni, called the Corinthian 15, started a campaign calling for the government to forgive their debt. For-profit colleges are allowed to get up to 90 percent of their revenue from federal aid, according to the National Association for College Admission Counseling.

"Colleges should open up doors for opportunity, but students in these failing programs often end up worse off than before they enrolled," Education Secretary Arne Duncan said last year. "That's simply unacceptable."

In 2014, the education department brokered a deal with Corinthian, requiring it to shut down 12 of its campuses and sell 85. Zenith Education Group Inc. purchased 56 of them, but negotiations recently fell through on the others, most notably Heald College, Bloomberg reported. Corinthian blamed the government, which imposed a $30 million fine April 14.

"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," Massimino said.

Closing the schools was the "only option," Corinthian said in a FAQ. Websites for the campuses began redirecting to the shutdown statement Sunday.

The company plans to help students transfer to other schools. It will hold meetings on campus, detailed here, to distribute transcripts. "We are enormously proud of you, and you should be proud of your education," Massimino said.