The hopes and aspirations of tens of thousands of students were officially dashed today. Beleaguered Corinthian Colleges sought bankruptcy protection on Monday, May 4th, after shutting down its remaining 28 career schools last week. This is the final step in what has become the largest collapse of U.S. higher education institutions in history.
California-based Corinthian Colleges claimed assets of $19.2 million and total debts of $143.1 million in its Chapter 11 filing in U.S. Bankruptcy Court in Delaware. Corinthian-affliated Heald Education, Everest College Phoenix, Rhodes Colleges and Pegasus Education all also filed for bankruptcy.
Statement from CEO of Corinthian Colleges
“Unfortunately 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,” Jack Massimino, CEO of Corinthian, noted in a statement published on Monday.
More on Corinthian bankruptcy
Corinthian, which was founded in 1995, started to crumble late last year after the U.S. Education Department almost cut the form’s schools off from further federal student aid. The firm thn sold half its 107 campuses to Education Credit Management in November of last year amid charges it had falsified grades, attendance and job placement rates. Of note, Corinthian schools received more than $1.4 billion in federal student aid in 2013.
On April 17 of this year, the form was ordered to enrollments in California, where nearly all of its schools were located. The firm also received a $30 million fine from the Education Department for ongoing misrepresentation of job-placement rates at its Heald business schools.
Analysts note that all efforts to sell the century and half-old Heald College or to make arrangements for teach-out partners to take in the remaining Everest College and WyoTech students in California failed.
Corinthian Colleges offered an online education. Court filings show that the firm offered educational opportunities to over 74,000 U.S. students and had more than 10,000 employees as of March 31st of this year.