TORONTO - An Ontario career college is looking for a new owner after its troubled U.S. parent company announced it would sell off or close down all its campuses.
All 14 branches of the Everest College of Business, Technology and Health Care — which are scattered across the province — are in the process of being sold, but the head of the college's Canadian division emphasizes that operations continue as normal.
"There is no impact on the Canadian campuses, it is business as usual," said Rupert Altschuler, president of Everest Colleges Canada.
"The entire plan is to sell the Canadian division as an ongoing enterprise. We are still accepting new students, of course, and we continue to teach all the existing students."
The Canadian campuses are currently owned by Corinthian Colleges, a California-based company which owns 107 college campuses across North America and also offers degrees online.
Allegations of falsifying job placement data used in marketing claims to prospective students at one of the company's U.S. campuses triggered an investigation by the U.S. Education Department, which eventually led to a severe cash shortage at the company when federal funds were withheld.
As a result, Corinthian Colleges has now agreed to close a dozen U.S. campuses in 11 states and place the rest of its campuses up for sale, including those in Canada.
Students and staff at all of Everest's Canadian campuses, as well as the Canadian regulatory bodies that accredit the college's programs, have been told of the planned sale, Altschuler said, adding that there had already been a "healthy" interest in the Canadian division by "many stakeholders."
"At some miraculous point of time, there will just be a change of ownership," he said.
"But when it comes to the day-to-day operations, it will have no impact whatsoever. Keep in mind this industry is heavily regulated. So whoever is going to purchase the division will have to comply with all the rules and regulations in Canada."
Everest's U.S. parent noted that it too wanted to make the transition to a new owner as smooth as possible.
"We are doing everything possible to minimize any inconvenience or disruption for our students," said Kent Jenkins Jr, vice-president of public affairs with Corinthian Colleges. "We are looking for a prospective buyer who will continue to operate our schools....and we will try and complete the sales process in six months."
Corinthian's problems began when it found concerning practices related to job placement data used in marketing claims at a campus in Georgia. The company reported the issue to regulatory authorities, which led to inquiries from the U.S. Education Department.
Jenkins said the company was given a 30-day deadline in January to provide millions of documents related to 175,000 graduates.
The company failed to meet the deadline and on June 12, the Education Department placed Corinthian on heightened financial monitoring, with a 21-day waiting period to receive federal student aid funds.
"That 21-day hold created a very significant cash shortfall for us and created the events that led us to where we are," said Jenkins, adding that federal funds make up 80 per cent of Corinthian's revenue.
The company continues to face multiple state and federal investigations.
Corinthian's closure and sale of its many campuses will now be observed by former U.S. federal prosecutor Patrick Fitzgerald, who will serve as an independent monitor.
Fitzgerald prosecuted high-profile cases against Lewis "Scooter" Libby, a top aide to Vice-President Dick Cheney, and former Illinois governor Rod Blagojevich.
— with files from the Associated Press.