It's final call for the leading titans of for-profit colleging:
SANTA ANA, Calif., April 26, 2015 – Corinthian Colleges, Inc. (Nasdaq:
COCO) today announced that the Company has ceased substantially all
operations and discontinued instruction at its remaining 28 ground
It has been a long hard road in the past year for these guys, and the helpful folks at USED have done their best to make sure that nobody's investment was severely damaged (well, except may the investment of time and debt put in by Corinthian students). Recently a group of students have even staged a sort of debt strike, and while the Consumer Financial Protection Bureau has already asked the courts to grant relief, and the Department of Justice has reportedly said that the Department of Education has "complete discretion" to make the loans evaporate, so far, much of that debt it still alive and kicking former Corinthian students in the butt.
What will this mean to current students? The press release says that company is looking for other outfits to provide "continuing educational opportunities for its approximately 16,000 students." Given Corinthian's previous practice of hiring graduates to pump up placement numbers, I shudder to think what this might mean.
But this sucks mightily for the students who were presumably hoping they might get an education in before the roof collapsed.
In the end, Corinthian blames the feds for their lack of success in getting anyone to take over some of the chain. Apparently the feds have attached some penalties to the college's assets, including their former students, and nobody is in the mood to pay Corinthian's fines for them.
Would this have looked less ugly if USED had moved sooner? Hard to say. But this final collapse of Corinthian is a one more good lesson on how the Invisible Hand of the Free Market causes a lot of damage when it waves around the educational marketplace. Not just to the investor and business backers (though one would hope they'd be burned enough to remember the lesson), but the damage done to the students who were caught between being continually bilked and being tossed out of school with literally nothing but debt and lost time to show for it. A school that can abandon its students in the middle of their education is not a school-- it's a scam.
One can only hope that the USED will finally do the decent thing and make these bunco victims free of their debt. The feds can afford to do it, and it would be the least they can do to help rescue these men and women who were really trying to do the right thing and get skills to get ahead.