Corinthian Colleges cuts jobs and raises tuition prices
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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