How Dozens of Failing For-Profit Schools Found an Unlikely Savior: a Debt Collector
It was once among the country’s most successful public companies, beloved by Wall Street for its simple, lucrative model: offering degrees to low-income students who borrowed heavily from the government to pay their tuition.
But the for-profit college giant Corinthian Colleges has spent much of the year in a tailspin. Investigations found the school used deceptive marketing to lure students into loans they had no hope of paying back, and the federal government suspended the schools’ access to federal aid.
Corinthian’s schools looked like they were toast. And then an unlikely savior swooped in.
The ECMC Group, which runs one of the biggest debt collectors used by the Education Department and has no experience teaching students, agreed last week to pay $24 million for more than half of Corinthian’s 107 campuses. The company plans to turn the for-profit campuses into nonprofit schools serving nearly 40,000 students.