Santa Ana, Calif.-based Corinthian Colleges Inc., which has seen its federal funds dry up while it remains under investigation nationwide, said Wednesday it will sell its six Everest College campuses in the suburbs over the next six months.
The company said it already has had "very substantial inquiries" from potential buyers for its schools. Local campuses are in North Aurora, Burr Ridge, Bedford Park, Melrose Park, Merrionette Park and Skokie, said company spokesman Kent Jenkins Jr. He declined to identify the potential buyers.
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"Our goal here is to ensure a smooth transition and allow students to complete their studies here or transfer elsewhere," Jenkins said.
The for-profit educational company has seen its stock plummet from around $19 a share about five years ago to 22 cents this week and has been under investigation by 20 states, the Consumer Financial Protection Bureau, the U.S. Department of Justice and the Securities and Exchange Commission.
In June, the federal government put a 21-day hold on its student aid and grants, which created a "significant cash shortage that threatened to disrupt our operations," said Jenkins.
Then last week, Corinthian signed an agreement with the U.S. Department of Education that forces the company to close 12 campuses, none of which are in Illinois, and sell 85 others, Jenkins said.
New students will no longer be accepted at the 12 that are closing, but they will continue to enroll at the other 85, Jenkins said.
U.S. Sen. Dick Durbin cautioned students not to enroll at Everest College, based on its troubled financial history and ongoing investigations.
"Corinthian is liquidating the schools and it breaks my heart that they keep enrolling students," Durbin said. "It's cruel and these students are getting deeper in debt."
"It is disgusting that Everest Colleges in Illinois have been allowed by the U.S. Department of Education to continue actively enrolling students," Durbin said. "Every day, I hear reports that advertising for these schools still remains on television and radio -- advertising that, no doubt, has been paid for with federal taxpayer dollars. This is appalling.
"Students in my state should take note: Everest College can't deliver on its promises. Do not enroll in these schools that are going out of business when there are plenty of good public universities and community colleges that often offer the same or better courses and cost much less."
On June 26, Durbin joined 11 U.S. senators to ask U.S. Secretary of Education Arne Duncan to protect students and prohibit Corinthian from enrolling new students. Durbin also asked Duncan to investigate Corinthian and its marketing practices, which Durbin said included a subsidy program for employers to hire graduates temporarily to show successful placements and then lying about job placement rates.
Corinthian has about 100 campuses in the United States and Canada. Everest provides career-oriented diplomas and associates, bachelor's and master's degrees in health care, criminal justice, business and the trades.
"This is not the end of the story," Durbin said. "A few more of these for-profit schools are teetering on the edge of collapse."