The agreement stipulates that the Santa Ana-based owner will sell 85 of its for-profit schools and close 12 others within the next six months. Among the schools for sale are the Colorado Springs branches of both Everest University Online and Everest College, which together employ more than 200 people.
The plan comes after months of federal and state investigations into the company’s business practices, including the legitimacy of claims related to job placement and enrollment data.
The Education Department said in a news release the agreement was aimed at allowing Corinthian’s 72,000 students to successfully complete their educations by means of either graduation, transfer or refund. The DOE halted enrollment at the “teach-out” schools and continues to monitor such activity at the schools for sale.
“We have accepted an operating plan for Corinthian Colleges Inc. that will protect students’ futures and fulfill the Department’s responsibilities to taxpayers moving forward,” U.S. Education Under Secretary Ted Mitchell said in the release. “Ensuring that Corinthian students are served well remains our first and most important priority, and we will continue to work with Corinthian officials and the independent monitor on behalf of the best interests of students and taxpayers.
In order to ensure current students are able to complete their educations, Corinthian will receive $35 million in federal financial aid to be used only for government-sanctioned activities.
The sale and teach-out processes will be overseen by an independent monitor, who will have complete access to the company’s personnel and budgetary data in order to see appropriate handling of tax dollars.
Kent Jenkins, the company’s vice president of public affairs, was reluctant to make what he called a “blanket statement” about whether the company expects additional layoffs as a result of the agreement.
“We are pleased to have reached an agreement with ED that helps protect the interests of our students, employees and other stakeholders,” CEO Jack Massimino said in a Corinthian release Thursday. “This agreement allows our students to continue their education and helps minimize the personal and financial issues that affect our 12,000 employees and their families. It also provides a blueprint for allowing most of our campuses to continue serving their students and communities under new ownership.”
The company’s campuses in Aurora and Thornton also are to be sold. Its North Aurora and Brighton campuses were listed for sale late last year and ceased enrollment in February, just before Corinthian announced company-wide layoffs.