Indiana, PA - Indiana County

WyoTech's future in limbo as effort to reach deal fails

by on July 02, 2014 11:00 AM

WyoTech faculty and students will have to wait a few more days before learning whether the school is to be closed or sold.

Word on the trade school’s fate is being delayed as its corporate parent, Corinthian Colleges Inc., failed to reach an agreement on a wind-down plan with the U.S. Department of Education on Tuesday, the agreed-upon deadline for doing so.

“While we did not reach an agreement yet with Corinthian officials, we are optimistic that further conversations with the company will produce an acceptable plan in the next few days that protects the interests of students and taxpayers,” said U.S. Undersecretary of Education Ted Mitchell in a statement.

With 107 vocational schools and colleges, Corinthian runs one of the country’s largest chains of for-profit schools. WyoTech, an automotive trade school, has a campus in Burrell Township.

Corinthinian, and for-profit schools in general, have come under scrutiny for deceptive marketing practices and for charging extraordinarily high tuition for programs that do little to no good in helping students win meaningful jobs.

The education department, which controls the student financial aid dollars Corinthian depends on to operate, has been looking at the company over concerns that it falsified the job placement data it uses to market itself to prospective students, among other things.

On June 23, the company disclosed that the department had placed a 21-day hold on its financial aid dollars — its schools usually have access to that money within one to three days of asking for it. The company already was financially stressed, and the move pushed it over the brink.

Negotiations ensued and, as a result, Corinthian agreed that it would work out a plan to “teach out” or sell its schools. Part of the plan, which was to have been finalized Tuesday, was a determination on which schools are to be sold and which are to be taught out.

The intent is to sell the schools that are to be placed on the block within six months. The schools that would be taught out would be closed through attrition — they’ll stop accepting new students but allow currently enrolled students to complete their studies.

Aside from WyoTech, Corinthian operates the Everest schools and Heald College, which grants associate’s degrees in legal, business, health care and technology programs. Corinthian said Monday that it intends to sell the Heald campuses, which are in California, Oregon and Hawaii.

Corinthian enrolls roughly 74,500 students and receives about $1.4 billion in federal financial aid.



Sam Kusic is a staff writer for The Indiana Gazette.
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