For-profit Corinthian Colleges to shut down remaining campuses

By Michael Erman (Reuters) - For-profit college operator Corinthian Colleges Inc, said on Sunday it will immediately shut down all its remaining campuses and cease substantially all other operations. The Santa Ana, California-based company had been subject to multiple federal and state investigations into whether it misled investors and students about its finances and job placement rates. Corinthian last year had agreed with the U.S. Department of Education to either sell or close down its campuses. Corinthian said in a statement that it is working to find other schools for the roughly 16,000 students affected by the shutdown. Most of the campuses being shut are located in California. Earlier this month, the Department of Education fined Corinthian $30 million for misrepresenting job placement rates to students in its Heald College system. The government determined that Heald would no longer be allowed to enroll students. Education Under Secretary Ted Mitchell said in a statement on Sunday that the Department of Education will reach out to Corinthian students to review their options, which may include loan discharges for students whose school has closed. "What these students have experienced is unacceptable and we look forward to working with Congress in an effort to improve accountability and transparency in the career college industry," Mitchell said. Corinthian sold off more than half of its campuses to non-profit education provider ECMC Group Inc late last year. It said the campuses that are closing include 13 remaining Everest and WyoTech campuses in California, as well as Heald College, which has 10 locations in California and one each in Oregon and Hawaii. Other campuses being shut are located in Arizona and New York. "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," Corinthian Chief Executive Officer Jack Massimino said in a statement. Increased regulation has hurt for-profit education companies such as Corinthian, Apollo Education Group Inc and Strayer Education Inc, which have struggled to attract students since a 2010 government crackdown revealed high student debt loads, low graduation rates and poor employability of graduates. Corinthian's shares closed on Friday in over-the-counter trade at less than 2 cents. (Reporting by Michael Erman in New York; Editing by Jeffrey Benkoe and Leslie Adler)