In this commentary, the author analyzes the impact of the closure of Corinthian Colleges.
For years, private for-profit colleges were Wall Street darlings. Robust margins and a business model that does best when the economy does worst enabled these companies to add hundreds of thousands of students, all funded by billions of dollars in federal subsidies.
What skyrocketed upward is now coming down, and the landing is not pretty. Corinthian Colleges, which a year ago had more than 72,000 students under the Everest, Heald and WyoTech brands, slowly collapsed over the last 10 months before announcing that it would close its final 28 campuses. The move leaves 16,000 students scrambling to sort out their educational futures.
Corinthian could have made this turbulent end smoother if it had exercised any real care for its students. Closure was inevitable since last June when the Department of Education delayed payments of federal student aid dollars due to concerns that Corinthian was not truthful about its students’ ability to find employment.