Corinthian Colleges warns it may shut down
NEW YORK (AP) — Corinthian Colleges, a for-profit education company with about 75,000 students nationwide, warned Thursday that it may fail as it clashes with U.S. regulators over student data.
In a filing with the Securities and Exchange Commission, Corinthian disclosed that the U.S. Department of Education has limited its access to federal funds after it failed to provide documents and other information to the agency.
That follows allegations that the company altered grades, student attendance records and falsified job placement data used in advertisements for its schools.
Shares in the company plunged 63 percent Thursday.
The department said that it heightened its oversight of the company after requesting data "multiple times" over the past five months. Regulators have grown increasingly concerned about inconsistencies in its job placement claims for graduates.
The Education Department has now limited the federal student aid funds available to the school and is now releasing those funds only 21 days after Corinthian submits student enrollment data, according to the filing.
Those funds are available in most cases within one to three days.
The Santa Ana, California company said that it has sought, but has been refused, additional financing by its lenders.
It's unclear what would happen to its students and to the more than 100 colleges it operates in North America, including Everest, Heald and WyoTech, if the company fails.
A spokesman at Corinthian declined to comment Thursday.
The Department of Education website says that students at schools that close before they complete their degree may be able to discharge federal loans. The department also works to find other options for students in order to finish their education.
According the Education Department, Corinthian receives $1.4 billion in federal financial aid each year.
The company also offers online degrees.
Shares of Corinthian Colleges Inc. fell 53 cents to hit 32 cents in afternoon trading Thursday.
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