Online course provider 2U has filed for bankruptcy after struggling with heavy debts since its high-profile purchase of edX two years ago.
The edtech company said the move was intended to put it back into a “competitive position”, but it faces a struggle to maintain the partnerships it has developed with 260 higher education institutions.
2U has long warned of deepening financial troubles, and it has undergone a series of restructuring processes in recent months.
The Chapter 11 process will reduce its debt by more than half and give it $110 million (£85 million) in new capital and will be completed by September, “if not sooner”, 2U said.
All programmes will proceed “as planned with no impact or disruption to learners as a result of this process, and 2U will continue providing all services for partners and students”, the company said.
“New capital and a healthier balance sheet will enable us to continue our longstanding mission,” said chief executive Paul Lalljie.
“The steps we are taking today will enable us to continue investing in our offerings, services and world-class team to deliver unparalleled online learning to meet the needs of students today.
“As we move towards the successful completion of this transaction, we are steadfastly focused on what matters most: our partners and learners.”
2U paid $800 million to Harvard University and the Massachusetts Institute of Technology to buy most of edX, one of the original providers of massive open online course (Moocs), which were hailed at the time as having potential to revolutionise higher education.
But like many other companies that offer online courses, it has struggled to monetise its offering and has lost out in the face of increased competition as more universities choose to launch their own online programmes.
