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Friday, Apr 12, 2024
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Corinthian Colleges Inc.

Santa Ana-based Corinthian Colleges Inc. was at the head of the class until the proposed federal regulation threw it back a grade.

The vocational school operator has spent the past several months dealing with proposals from the Education Department that would fall hard on for-profit schools.

Corinthian runs more than 100 campuses in the U.S. and Canada that offer degrees in healthcare, criminal justice and other areas. Many of its prospective students would be affected by the new rules.

The company saw big growth during the recession but has come under fire for students who took on more debt than they could afford.

Corinthian posted 65% revenue growth for the three years through June 30. The company went from $1 billion in revenue for the 12 months through June 2008 to $1.76 billion for the same period through this June.

That pushed Corinthian to the No. 10 spot on the Business Jour-nal’s 2010 list of the fastest-growing public companies in Orange County.

Last year, the company ranked No. 17 on our list.

The company’s growth has been spurred by laid-off workers seeking training for new jobs.

The trend continues: Corinthian saw new student starts—a measure of those who enroll and then show up for class—rise about 17% for the three months through August versus a year earlier.

Corinthian opened four schools during the recently ended quarter, including campuses in Santa Ana, Milwaukee, Modesto and the Dallas area.

“The demand for students remains very robust,” Corinthian Chief Executive Peter Waller said.

Colorado Center

The company recently opened a 500-worker center in Colorado Springs, Colo., to support Corinthian’s online operations.

Corinthian also has made acquisitions, including 2009’s buy of San Francisco-based Heald Capital LLC, parent company of Heald College.

Investors, analysts and other company watchers are wondering whether Corinthian’s growth can continue.

The company’s shares are down nearly 60% since the start of the year on a recent market value of $570 million.

Federal regulators have proposed a dozen or so rules that would limit how schools recruit students and potentially could cut off federally backed loans to their students.

The rules stand to impact Corinthian and other for-profit school operators the hardest. About a third of for-profit school graduates are actively repaying their student loans, compared to about 55% for public colleges, according to a Government Accountability Office report.

The rules are set to take effect in 2011 and 2012.

Corinthian gets the bulk of its revenue from students with federal loans.

The company launched a marketing campaign last month that highlights its graduates and takes issue with the proposed federal rules.

The campaign is geared toward lawmakers who may have influence with the Education Department.

Corinthian also is bracing against the prospect of a countercyclical downturn as the economy improves and fewer people seek training at its schools.

“We’re attempting to avoid the boom-splat cycle the company has seen in the past,” Waller said. “We have put many things in place to avoid that.”


THE NUMBERS

Three-year growth: 65%

12-month revenue through June: $1.76 billion

Yearly profit through June: $146 million

Market value: $570 million

Employees: 15,000, 750 in OC

Company: for-profit school operator

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