Extended Negotiations Over Corinthian's Phasing-Out
- For-profit chain works with feds on phase-out plan
- Feds and Corinthian agree to a plan for the for-profit's closure, but questions remain
- Corinthian's failure could cost the federal government $1.2 billion
- Corinthian's failure (and U.S. role in it) fuels for-profit critics
- Major for-profit chain faces bankruptcy as feds turn up heat
The U.S. Department of Education failed to reach an agreement with Corinthian Colleges on how to sell or close its 107 campuses, the department said Wednesday. The two sides last month agreed to an initial plan, through which the feds released held financial aid payments to the cash-starved for-profit chain. Announcements of that deal said negotiators would finalize the phasing-out arrangements for Corinthian by July 1. The department said yesterday that the plan remained due by that date.
“While we did not reach an agreement yet with Corinthian officials, we are optimistic that further conversations with the company will produce an acceptable plan in the next few days that protects the interests of students and taxpayers,” said Ted Mitchell, the under secretary of education, in a written statement.
The company said in a statement it continues to work cooperatively with the department and that they expect to have an agreement completed in the next few days.
Mitchell told reporters Wednesday afternoon that there were “no immediate consequences” for missing the July 1 deadline.
“We extended the MOU under which we were operating with them,” he said. “We’re doing a day-by-day extension.”
(Note: this story has been updated to include additional remarks from Mitchell).