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Corinthian Colleges Selling 56 Campuses to Student Loan Servicer

By    |   Friday, 21 Nov 2014 09:27 AM

Corinthian Colleges, the for-profit career school chain that has been under investigation in 20 states for its recruiting, lending, and marketing practices, has agreed to sell half its 107 campuses to a student loan servicing company in a $24 million deal.

Educational Credit Management Corp. will purchase 56 campuses from Corinthian, a move that's expected to affect some 39,000 students, according to Bloomberg.

In September, the U.S. Consumer Financial Protection Bureau filed a lawsuit against Corinthian, accusing the company of deceiving students into taking out unaffordable loans by falsely advertising job prospects, The Huffington Post reported. The bureau said the college then used illegal debt collection tactics to force students to make good on the payments.

Corinthian then threatened to close its campuses in July when the U.S. Education Department imposed a 21-day delay on the company's access to federal aid because of past complaints.

"Everest and WyoTech students will benefit greatly from ECMC Group's commitment to students and its goal of making a positive difference in career education," Corinthian chairman Jack Massimino said in a statement, according to the L.A. Biz. "ECMC will focus significant resources on student programs and services and enhance the future prospects of Everest and WyoTech."

ECMC chief executive David Hawn told The Wall Street Journal that the company will overhaul the Corinthian program under a new nonprofit called the Zenith Education Group, and work on a plan to reduce student debt while increasing job placement rates and transparency.

"We really do want to transform these schools," Hawn said. "There is work to be done."

Hawn told The Journal that ECMC is setting a goal of slashing tuition by 20 percent for new students at most Everest programs and plans to give students millions in annual grants.

Some have complained, though, that ECMC's purchase of Corinthian assets represents a conflict of interest and does not help students.

"ECMC has no experience running a college, let alone one of this scale, and is instead known for ruthless and abusive student loan operations," Lauren Asher, president the education advocacy group the Institute for College Access & Success, told Bloomberg. "The agreement provides virtually no relief to the Corinthian students."

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Corinthian Colleges, the for-profit career school chain that has been under investigation in 20 states for its recruiting, lending, and marketing practices, has agreed to sell half its 107 campuses to a student loan servicing company in a $24 million deal.
corinthian, colleges, sells, campuses
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2014-27-21
Friday, 21 Nov 2014 09:27 AM
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