San Jose Mercury News. July 25, 2014.
Accused by the California attorney general of deceiving students about its failing financial status, the career-college company Corinthian Colleges, Inc. has agreed to more broadly disclose that it plans to sell all of its California campuses as it goes out of business.
The Santa Ana-based career college company -- which owns Heald, Everest and WyoTech -- will post "conspicuous links" on its college websites to information about the planned sales and send notices to its California students with the same news, according to the agreement announced Friday afternoon by Attorney General Kamala Harris' office.
It will also add a statement to its California campus websites that GI Bill benefits are not available for new enrollees at those schools. According to a timeline in the agreement, Corinthian has removed references that its schools were community fixtures -- statements Harris alleged were deceptive.
In exchange, Harris will drop the injunction against Corinthian she had sought this month.
Prospective students interviewed by this newspaper have said that their recruiters did not tell them about their schools' uncertain future or had dismissed news reports as being exaggerated.
Corinthian spokesman Kent Jenkins this week strongly disputed that recruiters were misleading students, saying they have been instructed to tell prospective students about the changes.
Jenkins said Friday the company had agreed with the attorney general's office to post its disclosure notices online and to give them to current students, but insisted it didn't need outside pressure to do right by its students.
"Corinthian Colleges has voluntarily -- and without direction from the Attorney General's office -- worked to address student concerns," he said Friday in a statement. "We have been providing clear disclosures regarding the pending sale of our schools and we will continue to do so."A superior court judge had denied Harris' request for an emergency injunction, and the two sides were due to return to court next month.
Corinthian owns five Bay Area campuses, including WyoTech in Fremont and Heald Colleges in San Jose, Concord, Hayward and San Francisco. It told investors in mid-June that a cash-flow crisis triggered by a freeze on its federal financial aid could cause the company to go under.
The Department of Education released some federal funds to the company to allow for a smoother wind-down of operations. As part of that agreement, Corinthian may not enroll new students at the 12 campuses it plans to close. None of those schools are in California.
New enrollees at schools slated for sale must sign a disclosure form saying that they understand their campuses are on the market.