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(Update: On Monday Corinthian Colleges released the full text of the operating agreement it reached last week with the U.S. Department of Education. The document includes a list of which campuses and online programs the company hopes to sell. Those not listed will be closed.) 

The U.S. Department of Education and Corinthian Colleges agreed late Thursday to a plan to close or sell the for-profit provider's 107 campuses and online programs. It remained unclear which of the company's Everest, Heald and WyoTech chains will be sold.

The department said it would release $35 million in financial aid to keep the cash-starved Corinthian afloat throughout the process.

The money will be used solely for educational activities, according to a statement from the department. That means student refunds and payroll expenses, not shareholder dividends or legal fees. And the feds will need to sign off on how the money is used.

The company said it will put 85 of its U.S. campuses up for sale, with any deals to be completed within approximately six months. A dozen will close gradually. Its Canadian campuses are also for sale.

Corinthian, which enrolls 72,000 students, will hire a department-approved monitor to oversee the plan's execution.

The company agreed to tell all students at campuses that are being closed about a "teach out" option, giving them the choice to complete their studies. The for-profit will also give refunds to students in a "number of circumstances," the department said. The feds and Corinthian will work together to create a reserve fund of $30 million for those refunds.

Few details of the agreement were released. The department said the plan for specific campuses and programs will be available on July 8, when it goes into effect.

"This agreement allows our students to continue their education and helps minimize the personal and financial issues that affect our 12,000 employees and their families," said Jack Massimino, the company's chairman and CEO, in a written statement. "It also provides a blueprint for allowing most of our campuses to continue serving their students and communities under new ownership."

Students presumably will be able to stay enrolled at Corinthian campuses that are to be sold, although the releases did not offer specifics about how that option might play out.

The company will immediately halt enrollments at campuses that are being closed -- and at all locations until July 8, Corinthian said. Campuses that are on the block will provide required notifications to students. The company's continued enrollment of students has been hotly contested, including by Senate Democrats.

“We have accepted an operating plan for Corinthian Colleges that will protect students’ futures and fulfill the department’s responsibilities to taxpayers moving forward,” Ted Mitchell, the under secretary of education, said in a written statement. “Ensuring that Corinthian students are served well remains our first and most important priority, and we will continue to work with Corinthian officials and the independent monitor on behalf of the best interests of students and taxpayers.”

Competing Interests

Corinthian is facing a raft of federal and state investigations. Most revolve around allegations of inflated job-placement claims and deceptive marketing. 

The struggling for-profit began to topple last month, when the department placed its finances on a tighter watch. The department also improvised by slapping a 21-day hold on all of the company's financial aid payments. 

That move was due to the company's slow response to information requests from the department. Corinthian, however, has disputed that claim, saying it has worked hard to comply by answering a wide range of questions about 175,000 graduates.

Corinthian was already weakened by declining enrollments. The hold on payments pushed it beyond the brink. So the company and feds worked together on a preliminary plan to close or sell all of its campuses and programs. Negotiators blew past the feds' original deadline of July 1 for the final agreement. 

Students can have federal loans discharged if their institution closes before they can complete their studies. In a recent legal filing Corinthian said the federal government was on the hook for more than $1.2 billion in loans if the for-profit shut down.

Consumer groups and a dozen Democrats in the U.S. Senate, led by Sen. Dick Durbin of Illinois, have pushed the department to either shut down most of the company's campuses or at least give students the option to leave programs that are being gradually phased out. They will likely be disappointed in the department's solution.

For example, Ben Miller, a senior policy analyst at the New America Foundation and former department official, has written about Corinthian's poor showing on "gainful employment" and student loan default metrics. Most campuses besides Heald lag badly under gainful employment measures, he said, and leave students in "perilous debt situations."

Advocates for the for-profit sector, however, had a different take. Noah Black, a spokesman for the Association of Private Sector Colleges and Universities, the industry's primary trade group, said the plan to sell most of Corinthian's campuses suggests many of the academic programs on those campuses were worth saving.

“The department has preserved long-term student access and opportunity to the overwhelming majority of Corinthian’s campuses," Black said via email. "The logical conclusion is that these campuses are providing students with quality career-focused education.”

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