Troubled For-Profit College Gets a Savior With Its Own Checkered Past

Corinthian Colleges, the for-profit chain under investigation for misleading students and faking job placement records, has a savior. The Educational Credit Management Corp. announced Thursday it plans to buy 56 of troubled Corinthian Colleges’ 107 campuses for $24 million—quite a deal, considering the chain was worth $4.2 billion in 2003.

But ECMC, as it’s called, has had troubles of its own. The nonprofit’s primary business is as a guarantor of student loans; it collects on the loans it guarantees. It also runs a secondary business, in which it aggressively fights borrowers in court when they try to offload student loans in bankruptcy. The deal “raises great questions about their purposes,” says Representative Steve Cohen, a Democrat from Tennessee, citing ECMC’s “dubious or questionable tactics” and the predatory practices of the for-profit college industry. “There’s a stench that’s out there above this whole area, and the merger.”