Dive Brief:

• The commission that administers California’s college financial aid program has stopped paying a subsidiary for-profit college chain owned by financially troubled Corinthian Colleges.
• The California Student Aid Commission put Heald College, which has 4,497 students and 10 campuses in the northern and central region of the state, on “at-risk reimbursement status,” the Sacramento Bee reported.
• The commission’s move affects $1 million requested for payment last week and as much as $14 million in state grants through June.

Dive Insight:

Corinthian is also slated to be delisted this week by NASDAQ for failure to provide quarterly earnings reports, according to Consumerist. That last detail could be troublesome for ECMC Group, which purchased 53 Everest College and three WyoTech campuses from Corinthian in November. Both issues, however, are certain to be a headache as Corinthian attempts to sell the Heald campuses.

The commission said it cut off payments because Heald failed to demonstrate that it is financially stable. The school couldn’t provide audited financial statements in response to a Jan. 22 request. Corinthian says it was surprised by the commission’s action and that it will “vigorously oppose” it. The shuttering for-profit added a new independent accountant at the end of January, though it’s not clear if that is an excuse for the absence of audited financial statements. The commission will decide on its path forward after a public hearing scheduled for Friday.