Corinthian Colleges announced its plan to sell Heald College locations earlier this week, including ten locations in California, according to a filing with the US Securities and Exchange Commission (SEC).
“The Company has not yet secured a buyer for all or any subset of the Heald Schools, but has allocated internal resources to identify potential buyers and evaluate proposals for these campuses,” the filing states. “The Company intends to execute definitive sales agreements with one or more third parties for the sale of the Heald Schools within approximately six months.”
On the Salinas campus, one day before the announcement went public, school was in session just like any other day. According to Roberto Robledo of The Californian, students were told classes would continue and their financial aid would not be affected. They stated the school was to be sold, but not close. Officials could not confirm this information.
Heald College celebrated its 150th anniversary this April.
California Attorney General Kamala Harris sued the corporation last year, stating the company overcharges students and falsifies graduation and job placement rates, among other things. Harris recently added to this by accusing the company of false advertising to perspective students, saying the college had not made its financial struggles public, according to Jeremy White for The Sacramento Bee. The state also deferred financial aid from the school’s military veteran’s training program, which blocked grants for new students.
“It is unacceptable yet not surprising that Corinthian Colleges continues to illegally target vulnerable Californians – including low-income individuals, single mothers and veterans returning from combat – by lying about its dire finances and failing to tell prospective students that the schools to which they apply will all be sold or closed,” Harris said in a statement last week accompanying the charges.
The 72,000-student company had reached an agreement with the US Department of Education (DOE) last week to sell off its schools and to stop student enrollment, after the department had put a 21-day hold on the company’s access to federal student aid, 85% of its revenue.
In return, the DOE would fund the school with $16 million to allow current students to finish their degree programs at their current school, or to transfer to another location.
This agreement left many parents, who felt the government should have shut the school down immediately, angry. One parent stated the money would have been better spent getting current students and faculty transferred into better schools, writes Katy Murphy for The San Jose Mercury News.
The nationwide for-profit Corinthian Colleges has been sued in several states for similar issues.
A new bill is being introduced in California state legislature that would require deeper examination of for-profit career colleges. SB 1247 is currently with the Committee on Appropriations.