Corinthian Colleges Shuts Down, Ending Classes for 16,000 Overnight

Image: A person walks past an Everest Institute sign in a office building in Silver Spring, Md., on July 8.

Corinthian Colleges operated under the names Everest, Heald and WyoTech in 25 states before it came under investigation early last year. Jose Luis Magana / AP

In what's believed to be the biggest shutdown in the history of higher education in the United States, Corinthian Colleges said Sunday it's closing its remaining 28 for-profit schools effective immediately, kicking about 16,000 students out of school.

Corinthian, based in Santa Ana, California, said in a statement and an email to students that it would lean on government agencies and other institutions to place the students, who were enrolled at Heald College locations in California, Hawaii and Oregon and at Everest and WyoTech locations in California, Arizona and New York.

"It was very shocking to be told 'hey, tomorrow, no more school,'" Alexandra Roske, a student at Corinthian's Heald College in Salida, California, told NBC station KCRA of Sacramento on Sunday.

"I love school," said Roske, a single mom with about $18,000 in debt for dental assistant courses she won't be able to complete. "I put everything I had into my academic career to set myself up for a bright future, not only for me but for my family."

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Jordan Castle, was working toward a medical assistance degree at Everest Institute in Rochester, New York, found out her classwork was over via social media.

"I was tagged in a status on Facebook from one of our classmates asking what was going on and what was the deal with these emails," Castle told NBC station WHEC. "I didn't understand what was going on."

The announcement comes only a couple of weeks after the U.S. Education Department said it was fining Corinthian $30 million for misrepresented job placement data and altered grades and attendance records.

In an investigation that began in January 2014, the Education Department found that Corinthian locations misled students by inflating their job-placement rates. In September, the Consumer Financial Protection Bureau sued the company, alleging that it used the inflated placement rates to recruit students to take out expensive private loans, which made up about 85 percent of its revenue.

For example, the government found that Corinthian campuses paid temporary employment agencies to hire their graduates and send them back to the same campuses — counting them as having been successfully placed in careers. And Corinthian locations counted students who were already working before they even enrolled as having been successfully placed.

Corinthian sold many of its campuses to a nonprofit education group last year, allowing many students to continue their schoolwork. But it was unable to sell the remaining 28, which it blamed Sunday on "federal and state regulators seeking to impose financial penalties and conditions on buyers" and potential partners.

"We believe that we have attempted to do everything within our power to provide a quality education and an opportunity for a better future for our students," Chief Executive Jack Massimino said.

The Education Department said it would help the stranded students review their options, including possibly forgiving some of their loans.

"What these students have experienced is unacceptable," it said in a statement. "As Corinthian closes its doors for good, the department will continue to keep students at the heart of every decision we make."

But students said they were intensely frustrated by the out-of-the-blue news.

"I was two months away from getting my degree, and it's just getting harder because they didn't give us a warning," said Mark Corpuz, who was studying for a degree in health information technology at Heald College in Honolulu, Hawaii.

"My friends are pretty angry about it, too," Corpuz told NBC station KHNL. "Some of them are in the same situation as me. And also some of them, they quit their jobs just to be full-time students."