Everest College Owner May Shut Down School

wheywhey

wheywhey

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Corinthian Colleges Faltering as Flow of Federal Money Slows

JUNE 26, 2014

You may have never heard of Corinthian Colleges, but it is a principal beneficiary of federal student loans, taking in $1.4 billion a year from the government. It operates schools under the names Heald, Everest and WyoTech. A week ago it said it would be unable to finance its operations past the end of this month and disclosed that the Education Department had slowed the flow of federal money, pointing to what it said was admitted fraud at Corinthian in reporting both grades and job placements. But Corinthian persuaded the department to keep pumping in federal money, at least temporarily.

The department initially said it would hold up funding of student loans for as long as 21 days to give it time to check on whether the students were eligible for the loans. Corinthian responded that such a delay would be fatal and damage its 72,000 students on 107 campuses. It said its finances were so perilous that it could not operate for more than a few days without an inflow of cash.

Even before the government action, Corinthian had violated covenants on loans from Bank of America, leading the bank to reduce the amount it could borrow and to demand faster repayment. While the company’s financial statements showed it had a sizable net worth, a chief asset was the money it would save on taxes on future profits because of past losses, and it has been forced to write off much of that asset. Other assets included money owed by students who had already defaulted on their loans.

Confronted with warnings it would be responsible for hurting so many students, the department blinked. In negotiations over the last weekend, it agreed to pump in an immediate $16 million, with more expected to follow, even though Corinthian has not provided many of the documents the department demanded months ago.

Corinthian is supposed to pick campuses that it plans to sell to others and those that it will close. That latter group will go into “teach out,” meaning the schools will continue to operate for students already enrolled, but no new students will be admitted. Details are supposed to be ironed out by Tuesday.

If that is carried out, it appears that Corinthian, which at its peak was valued by Wall Street at more than $3.4 billion, will vanish. But many of those campuses may just change names and continue to operate under other owners.

A suit filed by the California attorney general last year contended that Corinthian lied about the success of its former students as it focused on single mothers whose income was at or near the poverty line. The suit quoted internal Corinthian documents as describing its target audience as “isolated” and “impatient” individuals with “low self-esteem.” It said the company used high-pressure sales tactics and advertised on the Jerry Springer television show.
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(Continue for rest of story.)
http://www.nytimes.com/2014/06/27/b...as-Federal-Cash-Wanes.html?ref=education&_r=0
 
88m3

88m3

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Honestly it's bad news for people who actually got degrees from them...


I will sleep a little bit better not wondering how many kids and adults get tricked into going there in the future...
 
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