Here’s how a debt collector plans to turn around failing for-profit colleges

Here’s how a debt collector plans to turn around failing for-profit colleges

Business

By Danielle Douglas-Gabriel February 3
@DaniDougPost

Student debt collector ECMC Group on Monday completed its controversial purchase of more than half the campuses of Corinthian Colleges, the embattled for-profit education company that was once one of the biggest in the country. ... The $24 million sale has been met with resistance from lawmakers and student advocates since it was first announced in November. Critics have questioned whether a company with no experience teaching is qualified to take over schools serving nearly 40,000 students.

Corinthian, which runs Everest Institute, Wyotech and Heald College, has become the poster child for the worst practices in the for-profit education sector, including high loan defaults and dubious programs. Clouded by allegations of deceptive marketing and lying to the government about its graduation rates, Corinthian lost its access to federal funds last year, forcing the company to sell or close its schools.
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In another step to improve affordability, ECMC is establishing a $87 million grant program that will offer up to $10,000 a year to poor students whose financial aid awards don’t cover all of their expenses. The grants are meant to replace a notorious loan program, called Genesis, that landed Corinthian in hot water with the Consumer Financial Protection Bureau last September. ... Back then, the federal agency accused Corinthian of steering thousands of students into private loans that had interest rates as high as 15 percent. CFPB said Corinthian set its tuition and fees for bachelor’s degrees at $60,000 to $75,000 to force students to borrow from the program and that Corinthian then received a slice of the lender’s fees. CFPB is suing Corinthian for $500 million.
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ECMC plans to run the schools under Zenith Education Group, a subsidiary separate from its debt collection practice. The company has appointed former Howard University chief operating officer Troy A. Stovall as interim president of Zenith.

I think the Zenith Education Group might be what's left of the old Heathkit. I could be wrong.