An Arizona campus of Santa Ana-based vocational school operator Corinthian Colleges Inc. has been taken off probation by an accreditation body but has until March to show why its accreditation shouldn’t be revoked.
Corinthian warned of a material impact on its business and financial results if its Everest College Phoenix loses accreditation, according to a company filing with the Securities and Exchange Commission.
The school, with campuses in Phoenix and neighboring Mesa, has about 6,430 students and offers degrees in business, healthcare and criminal justice.
Corinthian runs more than 100 schools in the U.S. and Canada with 113,818 students overall.
A year ago, Corinthian received notification that the Arizona campus had been placed on probation by the Chicago-based Higher Learning Commission, an accreditation body.
The school lacked operational and academic control over its branch campus and online division, according to the commission.
The commission removed Everest College Phoenix from probation as it considers withdrawing its accreditation.
Corinthian has until March 21 to show why the school’s accreditation should stay.
The issue is one of several facing Corinthian, a for-profit school operator that faces the threat of potentially crippling federal regulation proposed for 2011 and 2012.
Corinthian and others are under fire for students who took on more debt than they could afford and for defaults on federally backed student loans.
Wall Street saw Everest College Phoenix’s removal from probation as a temporary reprieve for the company.
“While the threat of removal of accreditation is still a very serious concern, the company has bought some time, which should be seen as a mild positive,” BMO Capital Markets analyst Jeff Silber said, according to a Reuters report.
Shares of Corinthian closed up more than 5% Monday to a market value of nearly $374 million.
