Corinthian Colleges cuts jobs and raises tuition prices
Corinthian Colleges Inc. lost money in its fiscal second quarter, and it looks like existing students could have to make up the difference.
The Santa Ana-based company announced Tuesday that it will eliminate 4% of its workforce -– and raise average tuition prices a whopping 12% -– amid sagging student enrollment and a nationwide controversy over for-profit colleges.
The company reported a $163.7-million loss for the quarter ended Dec. 31, compared with net income of $39.4 million a year ago. The figure for the most recent quarter included a charge of $206 million.
Enrollment of new students –- the lifeblood of any school -– fell 8% in the period, and the company predicted that new enrollments could sink an additional 15% to 17% in the third quarter.
Corinthian attributed the enrollment drop to its decision last year to stop accepting the most troubled students amid a regulatory crackdown on the industry.
“Negative industry publicity and uncertainties in the regulatory environment also played a role in the decline,” Jack Massimino, Corinthian’s chairman and chief executive, said in a statement.
Federal lawmakers and education-industry groups have criticized Corinthian and other so-called for-profit colleges for high student-loan default rates.
Investors appeared satisfied with Corinthian’s performance. Its shares, which have fallen more than 70% since last April, rose 25 cents, or 4.8%, to $5.53.
Despite the layoffs, Massimino doesn’t appear to be among those will who suffer a financial hardship from Corinthian’s woes.
The company said in a filing with the Securities and Exchange Commission that Massimino could earn a bonus in the current fiscal year of as much as 115% of his base salary.
-- Walter Hamilton