The end of Corinthian Colleges, or resigning the game utterly

This morning the Corinthian Colleges system shuts down.  That means 28 for-profit “ground campuses” stop teaching.  “more than 16,000 students and employees” are hit, according to Wikipedia.

Campuses closed include Corinthian’s 13 remaining Everest and WyoTech campuses in California, Everest College Phoenix and Everest Online Tempe in Arizona, the Everest Institute in New York, and 150-year-old Heald College–including its 10 locations in California, one in Hawaii and one in Oregon.

Note the word “remaining”.  Corinthian has been closing campuses and units for the past couple of years, under pressure from the United States federal government, lawsuits, a student debt strike, and a wave of bad publicity.  Things were supposed to wrap up with CC units purchased by others, but the last ones fell through.

Falling shares. Chart by Jeff Benton.

What does this mean for higher education?

First, we could see this as a datapoint in a broader decline or, or crisis within, for-profit higher education.  Numbers are required, though, to see if there’s an ongoing net decline in student numbers and overall dollars.  Corinthian is a recently established entity, coming out of the mid-1990s.  It reminds me of those Russian campuses scheduled for closure, as that nation’s education minister announced: young for profits with, ah, not so hot reputations.  So are we seeing a market shake-out as it matures, or a sharp decline as the model doesn’t prove out?

“Finally, we see the end of this rotten company,” Senator Durbin said in a statement issued on Sunday… (source)

Second, we might also wonder what this means for teaching nontraditional student populations.  Corinthian targeted poor people, especially single mothers.  Are other campuses picking them up, either for- or not-for-profits?  The for-profits are defiant:

“As outsiders we don’t know all the facts, but we do know that Corinthian schools educated thousands of students who had been underserved by traditional higher-education institutions,”  [The Association of Private Sector Colleges and Universities] said in a statement. “We hope that the department will work with all stakeholders to ensure that these students do not lose access to higher education as a result of today’s announcement.” (source)

Third, what happens to students who took Corinthian classes and now owe money to that defunct outfit? Michael Berman brooded:

when a bank fails we make sure depositors don’t lose out but when prop school folds the students still owe $$$

Good point.  The US Department of Education emitted a hopeful blog post.  The feds might pay for student debt through a closed school discharge, unless they transfer credits, which seems to defeat the whole purpose (source). We’ll see.

Fourth, how does this tie into the larger economic crisis of higher education?  Steve Bragaw – who teaches at Sweet Briar – wondered on Twitter:

@Sweetbriaredu, Corinthian, @lsu…..who’s next? Took a year to go from Golden West in 8/07 to Lehman Brothers in 9/08

Is the entire higher education sector undergoing a correction?  Are we living through a giant shake-out of American colleges and universities?  Is it as stark as peak higher education, or merely cutting lose bad actors?

In the case of this one for-profit chain and the many people impacted, this goes way beyond a queen sacrifice.  Corinthian Colleges just resigned the game and walked away from the board.

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