A for-profit college chain that has been sued by California Attorney General Kamala Harris faces financial issues as it grapples with simultaneous federal scrutiny, filings show.
Harris has targeted Corinthian Colleges for allegedly misleading students about the value of its degrees. Corinthian officials deny those allegations and defend schools that include Heald College and Wyotech branches, saying they offer a leg up to students unable to enroll in traditional universities.
Now it appears Corinthian has financial woes of its own. In a Thursday filing with the federal Securities and Exchange Commission, the company references the U.S. Department of Education requesting data covering areas like placement and attendance rates. Government regulators want that information in part to trace student eligibility for federal financial aid, the document states.
That heightened federal oversight has included an order delaying financial aid money payouts to Corinthian. The action stems from allegations of “falsifying job placement data used in marketing claims to prospective students and allegations of altered grades and attendance,” according to a press release the Department of Education issued said Thursday.
Because of that lag, Corinthian’s “existing cash balances will be insufficient to sustain it,” the SEC filing warns.
“If the Company is unable to timely obtain alternate financing, the Company’s cash flows will not be sufficient to meet its obligations as they become due,” the document states.