Story updated at 7 a.m., Nov. 24, 2014
Corinthian Colleges will sell 56 of its for-profit campuses for $24 million to a group that will convert them into nonprofit schools, allowing more than 39,000 students to continue their education.
The deal with the nonprofit ECMC Group does not include the 25 Heald College, Everest and WyoTech campuses in California, including two in Orange County, and 14 Everest campuses Canada, the Orange County Register reported. Santa Ana-based Corinthian is still seeking buyers for those schools.
Twelve of the Corinthian campuses purchased by ECMC, which works with the U.S. Department of Education to collect student debt, were supposed to close after current students graduated. Those schools will still close once current students have finished their programs, as scheduled prior to the sale.
“This is an extraordinary opportunity for us to make a difference in career education by offering students a new path for gaining the in-demand skills and training that employers are seeking,” ECMC President David Hawn said in a statement.
Corinthians announced in July it would look to sell all of its campuses following probes by federal and state regulators. 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, according to the Register.
Investigators also alleged that Corinthian charged as much as $75,000 for a bachelor’s degree and pushed students into private loans with interest rates of roughly 15 percent, more than double the rate for a federal loan. More than 60 percent of Corinthian students with those loans defaulted within three years, damaging their eligibility for other financing.
—City News Service
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