Education Management Corporation, also known as EDMC, has a lineup of schools that includes Argosy University, Brown Mackie College and The Art Institutes. As of January 2013, EDMC operated 110 for profit colleges and universities in 32 U.S. states as well as in Canada. EDMC colleges currently enroll over 125,00 students, and have a collective mission of providing competitive, career-focused education programs.

Unfortunately, the corporation broke its loan agreements amounting to $1.3 billion in debt and has been attempting to work out arrangements with lenders for months. If EDMC is unable to reach a deal with creditors, it risks having federal funding cut off for any student loans, which is why the corporation has been working so hard to receive vital funding to continue. The education corporation has struggled financially as enrollments have declined, which the company believes began at the start of the recession.

Despite EDMC’s latest fiscal hardships, a recent agreement was announced on Wednesday that could call for loans against the company to be reduced by $1.1 billion to $400 million. Arranged with the support of New York City-based investment firm KKR, led by co-founders Henry R. Kravis and George Roberts, the agreement will convert EDMC’s loans into ownership stakes. If this deal were finalized, lenders would own more than 90% of the company. In light of the news, the stock price fell during the day to $1.47 a share, a loss of almost 5%.

The company also recorded interest expenditures of about $120 million a year in its last quarterly report. Tyler Gronbach, EDMC’s spokesman, said removing the interest payments would allow the schools to keep tuitions low. “This is part of the overall transformation of the company,” he said. “This is a key element that allows us to strengthen our financial foundation as we continue to focus on making higher education more affordable for students.”