Accreditation agency places Corinthian under warning

Reuters News
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Posted: Sep 19, 2014 6:44 PM

(Reuters) - Corinthian Colleges Inc said the accreditation agency looking into its placement records has directed the for-profit college to notify its students that it is under warning.

The Accrediting Commission of Career Schools and Colleges places colleges under warning when it has reason to believe that a school is not in compliance with accreditation standards and other requirements, ACCSC's website said.

For-profit colleges, which rely heavily on federal student aid funds, have come under fire in recent years for their poor track record in helping students find employment.

The placement results for the 2013 reporting year is under review. The agency wants the company to respond to questions regarding the findings in the independent audit of 2013.

The accreditation agency for Corinthian's 40 campuses has also asked the college to conduct a third-party audit on reported employment on all its campuses in its 2014 annual report.

Corinthian reached a deal with the Department of Education in July to sell most of its campuses or close them down within six months.

A school that receives a warning will be required to demonstrate corrective action and compliance with accrediting standards.

The college, which was sued on Tuesday by the U.S. consumer finance watchdog, said it intends to defend itself against the Consumer Finance Protection Bureau’s lawsuit.

Up to Friday's close, Corinthian's stock has fallen nearly 92 percent to 15 cents this year.

(Reporting by Abinaya Vijayaraghavan and Mridhula Raghavan in Bangalore; Editing by Don Sebastian)