Corinthian Schools Inc. filed for bankruptcy Monday in Delaware, a week after the Santa Ana-based for-profit school shut down all of its California campuses.
The company listed its assets as between $10 million to $50 million, with estimated liabilities between $100 million to $500 million.
Meanwhile, a bipartisan group of Sacramento legislators are introducing legislation to help students affected by last Monday’s shutdown, which included Everest and WyoTech schools.
“Corinthian Colleges’ abrupt shutdown has left thousands of students stranded and in debt,” Assembly Speaker Toni G. Atkins, D-San Diego, is quoted as saying in a press release issued on Thursday by her office. “The legislation we are advancing will ensure that students harmed by the closure of Corinthian and other high-risk, for-profit colleges will not be held responsible for the sharp practices and bad decisions of others.”
. “In addition to providing relief to these students, this legislation ensures that funds recovered from the legal action against Corinthian Colleges directly funds the student relief activities in this bill.” Assembly Minority Leader Kristin Olsen, R-Modesto, was quoted as saying in the release.
The vocational college company came under fire two years ago when the Attorney General’s Office filed suit, alleging that the company targeted its advertising toward low-income residents with inflated claims of job placement rates following graduation and training.
California Attorney General Kamala Harris and eight other attorneys general late last month urged the Department of Education to relieve the debt burden of thousands of students who attended Corinthian schools.
The court filing lists the 30 biggest unsecured claims. The top three are Barclays Capital Inc. of New York, $1.25 million; Ambassador Education Solutions of Melville, New York, $1.2 million; and Student Scout LLC of Chicago, $500,000.
The chain of schools once operated more than 100 campuses across the United States and Canada. But on April 27, school officials closed their last remaining 28 campuses, less than two weeks after the U.S. Department of Education announced a $30 million fine for misrepresentation.
The legislation is being written by Assemblyman Jose Medina, chair of the Assembly Higher Education Committee, D-Riverside.
“Corinthian has caused significant financial and educational harm to California students,” Medina is quoted as saying in the press release. “This legislation ensures our community colleges can provide these students with a second chance to achieve their educational goals, as well as provide students access to federal loan discharge and state tuition recovery programs.”
According to the legislators, Medina’s forthcoming legislation will waive community college fees for students harmed by the Corinthian shutdown; provide funding for community college counselors to help those students transfer and enroll in community college programs; provide legal assistance — including special assistance for veterans — with the loan forgiveness process; expand California Student Tuition Recovery Fund eligibility to all students attending a “high-risk, for-profit institution;” double the CSTRF to $50 million in size; create a task force to ensure that students get accurate information when their schools are closed.
Corinthian Colleges’ closure left about 16,000 students in five states in the lurch, some of them just weeks away from graduation. Colleges under the Corinthian umbrella included Everest and WyoTech schools in California, Arizona and New York and Heald College campuses in California, Hawaii and Oregon.
On April 14, the Department of Education announced it was fining Corinthian $30 million. According to federal officials, Corinthian officials failed to respond to allegations that the school lied about its post-graduation job placement success — a key selling point for many for-profit colleges — and faked grades and attendance records.
On Thursday, the California Office of the Attorney General announced a live webinar held on Monday, in conjunction with the California Student Aid Commission, United States Department of Education, Bureau for Private Postsecondary Education, the California Community Colleges Chancellor’s Office and the East Bay Community Law Center to provide information and resources for former Corinthian Colleges students looking to discharge their student loans.
A link to view the webinar will be available online today at oag.ca.gov.
CNS wire service contributed to this report.
