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WyoTech going up for sale

by on July 05, 2014 10:59 AM

WyoTech’s Burrell Township campus is among the 85 for-profit vocational and career schools owned by Corinthian Colleges Inc. that will be going up for sale.

Twelve other schools, however, are to close under an agreement reached late Thursday night with the U.S. Department of Education.

The agreement provides a plan for winding down California-based Corinthian, which ran into trouble last month when the department imposed a 21-day hold on the student financial aid dollars Corinthian depends upon to operate.

Usually, that money is available within one to three days of asking for it.

The hold was imposed because Corinthian, according to the department, had failed to comply with a request for enrollment and job placement data and had failed to fully address concerns about its business practices.

The department has been looking at whether Corinthian, among the country’s largest chains of for-profit schools, made false marketing claims to entice students to enroll and had altered grades and attendance records.

Corinthian already was on shaky financial footing and said it could not survive the 21-day hold.

That led to negotiations between the department and the company, and eventually to an agreement in principle on what was to become of it. Thursday’s agreement provided a more precise plan for winding down the company’s operations.

Aside from WyoTech, an automotive trade school, Corinthian owns the Everest schools and Heald College. It serves about 74,500 students in 26 states and Ontario, Canada, and receives about $1.4 billion in federal financial student aid annually.

Jack Massimino, Corinthian’s chairman and chief officer, praised the agreement in a statement.

“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,” Massimino said. “It also provides a blueprint for allowing most of our campuses to continue serving their students and communities under new ownership.”

The company declined to identify the schools that will close and those that will be sold. And so did the Department of Education, despite that it should be part of the public record.

The schools are identified in an exhibit attached to the agreement, which the department emailed to reporters on Thursday night. However, it omitted the exhibit, and refused to provide it when the Gazette asked for it on Friday.

A source familiar with the agreement told the Gazette this morning that the Burrell Township campus is among those to be sold. The intent is to sell all 85 schools sometime within the next six months.

Ted Mitchell, the undersecretary at the Education Department, said the agreement will “protect students’ futures and fulfill the department’s responsibilities to taxpayers moving forward.”

“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,” Mitchell said.

Under the terms of the agreement, the department is giving the company access to up to $35 million in financial aid dollars. That money is to be used only for day-to-day operating expenses, such as payroll, and will allow the company to keep teaching classes as it executes the plan.

Additionally, Corinthian is to hire an independent monitor at its own expense. The monitor will be looking over the company’s shoulder and will review schools closure and sales plans.

Also, Corinthian is to inform students of their options, and each campus is to create a plan allowing students to complete their program, if they choose to do so. Under a number of circumstances, students will be eligible for a refund paid for using a reserve fund of at least $30 million from Corinthian’s funds.

The company faces multiple state and federal investigations. California Attorney General Kamala Harris has sought a court order that would force the company to stop advertising and to start telling prospective students that it is looking to sell or shut down its colleges. Pennsylvania is one of 16 other states jointly investigating the company’s practices.

The Associated Press contributed to this report.



Sam Kusic is a staff writer for The Indiana Gazette.
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