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Cross Your Fingers

What Happens to Students When Their College Goes Under?

Some students get relief, but others may be left behind as a for-profit giant and a mysterious debt buyer agree to forgive $480 million in loans
This Everest College location in Virginia is one of about 65 Corinthian Colleges campuses being sold to Education Credit Management, but it is one of 12 that eventually will be closed

This Everest College location in Virginia is one of about 65 Corinthian Colleges campuses being sold to Education Credit Management, but it is one of 12 that eventually will be closed

Photographer: Tripplaar Kristoffer/SIPA via AP Photo

After several delays and much public scrutiny, Feb. 3 marked a major milestone in the slow, complicated devolution of Corinthian Colleges, one of the country's largest for-profit schools, when Education Credit Management reached a final deal to buy about half of Corinthian's campuses. The sale includes the landmark promise to erase $480 million in outstanding loans for students at Corinthian schools, a move lauded by consumer advocates, who say Corinthian students were urged to take loans with predatory terms under the false promise of valuable job training.  Yet not every student who emerged from a Corinthian school with hefty debt will benefit from the relief.

ECMC, through a newly-created nonprofit provider named Zenith Education Group, is buying more than 50 campuses under Corinthian's Everest and WyoTech school franchises. It will continue to operate 53 locations and will also oversee "teaching out" (effectively winding down operations at) the dozen schools Corinthian had already agreed to close because of poor performance. That means the fate of roughly 35 Corinthian schools—and their students—is still unknown.