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Dive Brief:
- For-profit college operator Education Corporation of America (ECA) filed a lawsuit in a federal district court in Alabama against the Education Department and its Secretary Betsy DeVos that asks the court to appoint a receiver to oversee the company’s assets so it can avoid bankruptcy and restructure while completing a teach-out of campuses slated for closure.
- The lawsuit said the company has essentially stopped making payments on its debt and is facing evictions on some of its campus. The company relies on tuition and fees for the bulk of its revenue and has recently faced steep declines in enrollment. Restructuring without entering bankruptcy protection would let them maintain critical access to federal student aid.
- ECA wants the court to shield it from its creditors and evictions so some of its institutions can “go forward with their educational missions,” while others undergo the teach-out process and then close.
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