In Monday's pre-market, Corinthian Colleges (NASDAQ: COCO) announced that it has reached a memorandum of understanding (MOU) with the U.S. Department of Education which will allow the school to remain open. The parties have agreed to reach a finalized transition plan by Tuesday, July 1.
As a result of the MOU, Corinthian Colleges will immediately receive $16 million in federal student financial aid, which will prevent the school from suffering an immediate cash shortfall and allow students to continue as their programs.
Additionally, the school will continue with its plan to seek strategic alternatives for its operations. This will include the sale and "teach-out" of many of the school's campuses.
During the transitional period, affected campuses will not accept any new enrollments but will allow current students to finish there program or transfer to another institution.
As part of the MOU, Corinthian Colleges must engage with an independent compliance and business monitor approved by the Department of Education. The monitor will have access to all of the school's financials and will report its progress to the Department of Education.
Shares of Corinthian Colleges were last up 31 percent in the pre-market session.
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