For-profit college operator Corinthian Colleges said it will immediately shut down all its remaining campuses and cease substantially all other operations.
It is working to find other schools for the roughly 16,000 students affected by the shutdown, the company said in a statement on Sunday.
In a letter to students on Saturday, the company said it was in the process of arranging for students to continue their studies. The company added: “We want you to know that we made every effort to find a qualified buyer to purchase our remaining campuses and keep your school open and several had expressed interest in doing so. Unfortunately, largely as a result of recent state and federal regulatory actions, we were unable to complete a sale, and our only option was to close our schools.
The Santa Ana, California-based company had been subject to multiple federal and state probes into whether it misled investors and students about its finances and job placement rates. Last year, it agreed with the U.S. Department of Education to sell or close down its campuses.
Back in February, Business Insider reported that a group of Corinthian students were refusing to pay back their student loans, writing in a letter to the Department of Education that, “Corinthian’s predatory empire pushed hundreds of thousands into a debt trap.”
Earlier this month, the U.S. Department of Education fined Corinthian Colleges $US30 million for misrepresenting job placement rates to students in it Heald College system. The government determined that Corinthian’s Heald College would no longer be allowed to enroll students.
Corinthian sold off more than half of its campuses to non-profit education provider ECMC Group late last year.
It said the campuses that are closing include 13 remaining Everest and WyoTech campuses in California, as well as Heald College.
Corinthian Chief Executive Officer Jack Massimino said “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.”
Increased regulation has hurt for-profit education companies such as Corinthian, Apollo Education Group Inc and Strayer Education Inc, which have struggled to attract students since a 2010 government crackdown revealed high student debt loads, low graduation rates and poor employability of graduates.
In the last year, shares of Corinthian fell more than 98%, with shares closing just below $US0.02 per share on Friday.
Back in 2004, the stock traded as high as $US60 per share.
Here’s the stunning chart:
(Reuters reporting by Michael Erman in New York; Editing by Jeffrey Benkoe)