NEW YORK, N.Y. – Corinthian Colleges will sell most of its campuses in the midst of several investigations and lawsuits by federal and state regulators.
The sale of Everest and WyoTech campuses to the non-profit company ECMC Group would allow more than 39,000 students to continue attending class, the company said Thursday.
ECMC, which provides financial literacy programs, will spend $24 million for 68 schools in 17 states, 12 of which are to be closed when the current students graduate.
Regulators have cracked down on for-profit colleges like Corinthian in recent years. The Obama administration late last month announced a rule that would require career training programs to show that students can earn enough money after graduation to pay off their loans.
The programs that fail to meet new “gainful employment” rules risk losing the ability to receive federal student aid.
The companies that run those schools filed a lawsuit this month challenging those new rules.
Regulators have said that Corinthian Colleges Inc. falsified job placement data and pushed students to take expensive private student loans. The Consumer Financial Protection Bureau is seeking more than $500 million from the company for pushing students to take private loans.
As part of a deal with the Education Department in July, Corinthian agreed to sell all of its schools. Corinthian is still seeking buyers for its 39 remaining campuses that serve about 20,000 students.
On Wednesday, the Nasdaq stock market notified Corinthian that it was no longer in compliance with listing requirements after failing to file mandated financial reports.
ECMC, based in Oakdale, Minnesota, said it will convert the schools it has acquired from Corinthian into non-profits. It also plans to lower the cost of some of its programs for new students by 20 per cent. That sale is expected to close in January.
Shares of Corinthian, based in Santa Ana, California, were trading for about 12 cents Thursday. Shares have fallen 93 per cent since the beginning of the year. Shares once traded for more than $36 apiece.