A corporation this large and with this significant a base of students and employees is indeed "too big to fail." However, they will serve as the scapegoat for all that Duncan has been forced to confront as Secretary of Education. The likely scenario is a waiving of the 21 day hold until Heald and WTech can be sold. This will then be used to discharge some of the larger (and politically-connected) obligations. Then, we move to bankruptcy. Brands than can scramble and get away from the Corinthian affiliation will do so rapidly so that they can continue. Private equity will then work to rebuild individual brands until then can again be sold to for-profit corporate entities.
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This sounds like the best plan.