TAMPA — Everest University’s 10 Florida campuses, including four in the Tampa Bay area, will be sold as part of a deal with the U.S. Department of Education that effectively dissolves its parent corporation, Corinthian Colleges.
Corinthian has been under investigation by the DOE, the U.S. Consumer Financial Protection Bureau and attorneys general in more than a dozen states, including Florida, over allegations it exaggerated job placement rates and inflated grade and attendance in its marketing pitches.
The for-profit chain based in Santa Ana, Calif., operates campuses under the Everest, WyoTech and Heald brands. Corinthian said last week it would put 85 of its U.S. schools up for sale and “teach out,” or gradually close, operations at 12 others.
Campuses in Tampa, Brandon, Largo and Lakeland were included on a list of the 85 schools the company said it would “make a diligent, good faith effort to sell to new owners.”
The company did not specify which schools will be shuttered, but a spokesman said none were in Florida.
The agreement with the Education Department states that as of today, the effective date, Corinthian must obtain written acknowledgement from new students that they have read notices and disclosures as to the status of the schools. Some students who had enrolled in schools that are to be closed are eligible for tuition refunds.
“This agreement allows our students to continue their education and helps minimize the personal and financial issues that affect our 12,000 employees and their families,” said Jack Massimino, Corinthian’s chairman and chief executive, in a statement. “It also provides a blueprint for allowing most of our campuses to continue serving their students and communities under new ownership.”
Under the agreement, the Education Department will appoint an independent compliance and business monitor who will serve as a liaison between Corinthian and the federal government.
The agreement allows Corinthian to continue to draw down federal student financial aid.
That ability is crucial to many for-profit institutions such as Corinthian. It was the government’s move last month to freeze the company’s federal funds that led it to contemplate an immediate and total shutdown of operations.
The Education Department and Corinthian instead reached a memorandum of understanding freeing the money with the condition the two sides develop a plan for the orderly transition of its campuses and to govern its daily operations while the transition is under way. That operating agreement was finalized late last week.
“Ensuring that Corinthian students are served well remains our first and most important priority, and we will continue to work with Corinthian officials and the independent monitor on behalf of the best interests of students and taxpayers,” Undersecretary of Education Ted Mitchell said in a statement.
Corinthian said it hopes to sell the schools within six months. Neither the Education Department nor Corinthian have mentioned potential buyers.
Trace Urdan, who follows the for-profit education industry for Wells Fargo, said he doubted other operators would buy the entire roster of Everest schools. Individual campuses,Urdan said, could be sold to companies including Lincoln Educational Services Corp., which operates Lincoln schools; DeVry Education Group; or Career Education Corp., which operates the Sanford-Brown campuses.
The WyoTech brand, including a school in Daytona Beach, might draw interest from Lincoln or Universal Technical Institute, which specializes in automotive-based education, Urdan said.