Loan guaranty company makes a bid for troubled college system.
Several states, including California, have accused the company of predatory advertising among other violations. The federal government has cracked down on Corinthian too, taking issue with the company’s handling of student loans.
Faced with continued pressure from state and federal officials, Corinthian Colleges plans to sell 56 Everest and WyoTech campuses to the ECMC Group, with the latter transforming the for-profit college network into a nonprofit entity. Some 40,000 college students will be affected. The good news is that they won’t have to worry that their campus will suddenly close down. Two Everest campuses are already on the way out.
Federal Government Support
The US Department of Education has thrown its support behind the ECMC Group’s efforts, what essentially resolves a big problem for students. Meanwhile, a number of states and the federal government will continue taking action against Corinthian.
In a statement shared last week, the ECMC Group has pledged to take several steps in a bid to help students. For instance, new students at its Everest campuses will see tuition reduced by 20 percent. The company has also pledged to put up millions of dollars in institutional grants per year to help students avoid taking out private student loans.
Transparency and Accountability
The ECMC Group has promised to provide greater accountability and transparency going forward. It intends to boost student completion rates and up grads’ job placement rates. Both rates are currently well below national averages. ECMC says that they’ll provide more information about their educational programs and provide details about placement rates and other measures of success to students.
On the job front, ECMC has promised to work closer with local and regional employers to ensure that their students are equipped with the skills to find work. To that end ECMC will upgrade certain programs while eliminating others. For students engaged in underperforming programs that will close, they will be given several options, including a refund of certain loans.
ECMC has also promised to offer smaller classes, improve academic counseling, provide tutoring and offer remedial services. These efforts are part of the company’s initiative to offer individualized support for students.
As part of the agreement, the US Department of Education will receive $12 million when the transfer to ECMC is completed and up to $17.25 million over the next seven years to aid students. The Genesis student loans currently held by Corinthian will be retired. Students can find which schools ECMC intends to buy by visiting this page.
About ECMC
ECMC is a guaranty agency, a company that collects defaulted federal student loans. As part of that work, they get about 16 cents on the dollar according to EdCentral. In 2012, 89 percent of the company’s revenue came through collections. The company also owns Premiere Credit of North America, a student loan collection company on contract with the US Department of Education.
That the ECMC is already heavily involved in student loans and also has no experience in college administration, though worrisome, may not be enough to scuttle the deal. As EdCentral notes “ECMC is trying to say all the right things about its new role.” Those words, however, will mean little if students are not equipped with the skills needed to qualify for jobs in their fields.
See Also — For-Profit Colleges Fight Back Against Obama Administration Ruling
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