They were probably given certain assurances of future goodies from the ED to help the ED in this pickle. Remember, this deal is only needed to take down CCI...not save CCI. Ecmc will plug the bare minimum into "the school", allowing for the student base to drive down to near zero, allowing for a much easier and less costly teach out...without forgiving loans. Ecmc will be left with debt to collect on...as well as a favor from ED to cash in.
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Interesting question. Let's suppose that they did and it's now in their hands. What would be their incentive now to keep pouring money into these failing schools?
no
The collection portfolio they purchased definitely is a huge deciding factor in the deal. Think about a collection agency buying a failing school, what they bought a chance to try a different side of the industry, the DOE/Attorney Generals are letting them off the hook (when in the past a failing school was purchased the new owners are held accountable to clean up the previous mess but not in this deal) I have said it all a long...this deal was created to litigate the huge loss of CCi closing its doors and then the loans being forgiven cause everyone knew CCi could and would not make it through any teach out. Worse case if they can't...for 500,000 per campus they purchased if nothing else the collection portfolio that will eventually be collected on. Sometimes you have to call the baby ugly and this whole thing is ugly!
Given the low acquisition cost I think this is a plausible explanation.
I can't believe this comment is made.