You know how you can see an actor on a tv show and recognize him from somewhere, but you can't remember where, and it drives you a little bit crazy until it comes to you, days or weeks later? That's how I am with the story that the loan guarantor ECMC is buying several dozen Corinthian College campuses for less than a half-million each. There’s more to the story, but I haven't quite placed the actor yet.
ECMC is buying 56 campuses and paying very little for each. It's saying it will run them as nonprofits, and will show good faith by starting with a 20 percent tuition cut. It's promising to bring in a top-flight educational management team, despite never having run even a single campus of a college before. And it's saying, probably correctly, that it won't be a guarantor of any of the loans on its own campuses, because the Feds will.
I can see why the Feds are eager to sell. They have no desire to run a chain of colleges, and full refunds and payouts to everyone would be terribly expensive. Selling to ECMC makes the problem go away, or at least spreads it thin over several years. It strikes me as the same logic that made selling Chrysler to Fiat seem like a good idea. The Feds may be eager enough to sell to allow a tuition cut that would violate the 90/10 rule, as Trace Urdan pointed out yesterday.
But ECMC's interest is harder to explain. It has the means to do the deal, certainly, and it has the opportunity, but I’m stuck on the motive. Why is it doing this?
Read more at Inside Higher Ed: https://www.insidehighered.com/blogs/confessions-community-college-dean/placing-actor