Federal sanctions threaten sustainability of Corinthian Colleges (for-profit college company)
Source: LA Times
A besieged chain of for-profit colleges based in Orange County has signaled that it is in danger of shutting down after the U.S. Department of Education sharply cut back its access to federal money for student loans and grants.
Plagued by complaints that it had falsified student job placement rates, Santa Ana's Corinthian Colleges Inc. disclosed Thursday that the Education Department had heightened its financial scrutiny of the company. And it warned that the sanctions may jeopardize cash flow crucial to keeping the company afloat.
Corinthian is one of the nation's largest for-profit college corporations, with more than 81,000 students spread across more than 100 campuses in 25 states and Canada. The company has also been the subject of lawsuits and investigations by federal agencies and more than a dozen state attorneys general, including California.
"If the company is unable to timely obtain alternate financing, the company's cash flows will not be sufficient to meet its obligations as they become due, which would cause the company to be unable to continue as a going concern," Corinthian said in a report filed with the U.S. Securities and Exchange Commission.
Read more: http://www.latimes.com/business/la-fi-corinthian-colleges-20140620-story.html
From Wikipedia:
Corinthian Colleges faces numerous investigations and lawsuits.[3] The California Attorney General states that Corinthian Colleges targets single parents who are close to the poverty level, a demographic that its internal documents describe as "composed of 'isolated,' 'impatient,' individuals with 'low self-esteem,' who have 'few people in their lives who care about them' and who are 'stuck' and 'unable to see and plan well for future,' through aggressive and persistent internet and telemarketing campaigns and through television ads on daytime shows like Jerry Springer and Maury Povich.'"[4]
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