California Orders Corinthian Colleges To Stop Enrollment At WyoTech, Everest Campuses

everestThe collapse of for-profit education chain Corinthian Colleges – operator of Everest University, Heald College and WyoTech – continued today after a California regulator issued an order requiring the company to cease enrolling new students at its Everest and WyoTech campuses in the state.

The California Department of Consumer Affairs announced it issued an Emergency Decision [PDF] demanding that CCI stop new enrollments at several California campuses starting Thursday.

The Bureau issued the order after determining that the CCI schools did not meet the minimum state standards for financial resources. Among the findings was the confirmation that Everest and WyoTech failed to provide the Bureau with current financial statements as part of their annual reports.

Additionally, inspections of the two schools found they were unable to produce the required financial statements after repeated requests by the Bureau.

“While this Emergency Decision does not require Everest and WyoTech to cease operating, it is clear that Corinthian’s financial problems mean it is not financially stable enough to enroll new students at Everest or WyoTech,” said Bureau Chief Joanne Wenzel. “We issued the Emergency Decision to protect individuals who may have been thinking about enrolling at these schools.”

As part of the order, CCI has the right to ask for a hearing before the director of the Department of Consumer Affairs before the decision becomes effective. It was unclear if CCI would ask for such a hearing.

The Bureau’s order comes just a week after the Department of Education imposed a $30 million fine against CCI over the use of misstated and inaccurate job placement rates to recruit students at its Heald College campuses. As part of that order, the company was required to stop enrollment at Heald campuses nationwide.

California-based CCI – which is at the center of numerous federal and state investigations and lawsuits – has been facing a prolonged downfall since agreeing last summer to sell or close a majority of its campuses in a deal with the Department of Education.

The company completed the sale of some 56 campuses to Education Credit Management Corporation in early February. In order to close that deal, ECMC agreed to provide $480 million in forgiveness for current and former students who took out CCI’s high-cost private student loans.

Since then CCI has faced several other issues including being delisted from Nasdaq and notice from the California Student Aid Commission that it would halt grants to CCI students. Both of those moves came after the company failed to submit required financial statements to both the Securities and Exchange Commission and the student aid commission.

CCI’s obstacles haven’t just been relegated to the U.S.: the company’s Canadian operations closed with little warning to students and filed for bankruptcy in February.

Emergency decision halts new student enrollment at Corinthian Colleges’ WyoTech and Everest College locations [State of California Office of Public Affairs]

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