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WASHINGTON The acquirer of a for-profit college chain sued by the Consumer Financial Protection Bureau will forgive over $480 million in student debt under a deal announced Tuesday.
February 3 -
The Consumer Financial Protection Bureau suit against Corinthian Colleges is the second time the agency has taken public action against a for-profit school rather than a student lender.
September 16 -
The CFPB is considering suing Navient Corp., the largest student loan company in the U.S., for allegedly cheating borrowers, Navient officials disclosed Monday in a Securities and Exchange Commission filing.
August 25
WASHINGTON — A federal judge has ordered Corinthian Colleges to pay more than $531 million on charges brought by the Consumer Financial Protection Bureau that the for-profit college used illegal tactics to collect on student loan debt.
The order issued Monday ends a yearlong case in which the CFPB sued the now-defunct Corinthian in September 2014 for "luring tens of thousands" of consumers into taking out private loans and then "strong-armed" students into paying back the debt. Corinthian went into bankruptcy liquidation earlier this year so it cannot pay the judgment. But the CFPB vowed Wednesday in a press release that it would find ways to reimburse effected borrowers.
"Today's ruling marks the end of our litigation against a company that severely harmed tens of thousands of students, turning dreams of higher education into a nightmare," said CFPB Director Richard Cordray in a press release. "We all have much more work to do before current and past students who were hurt by Corinthian's illegal practices can be made whole. We remain deeply concerned about risks facing student borrowers in the for-profit space and will continue to be vigilant in rooting out harmful practices."
The CFPB reached a consent order in February with the buyer of Corinthian's campuses, ECMC Group, in which the company agreed to forgive more than $480 million in student debt from the legacy Corinthian loans.
The $531 million that Corinthian has been ordered to pay represents damages owed to affected consumers that will go to the CFPB for redistribution to harmed borrowers. The CFPB originally estimated that Corinthian issued more than $560 million in private student loans under its program.
