Corinthian Students to Get $51 Million in Student Debt Relief

LOS ANGELES (CN) – Almost 13,000 students who enrolled in the now-defunct for-profit college Corinthian will receive a total of $51 million in debt relief, California’s attorney general said.

The settlement finalized Monday offers assistance to students who went to Corinthian when it ceased business in 2014 through loans made with Aequitas Capital Management, according to the San Jose Mercury News. The financial services firm is under SEC-imposed receivership and provided loans to students of the school.

California Attorney General Xavier Becerra joined 12 other attorneys generals across the nation in reaching a $192 million settlement for students. He said debt relief for former Corinthian students was long overdue but said there are still students who have not “obtained the debt relief they deserve.”

On Monday, Becerra filed a lawsuit in Los Angeles County Superior Court seeking a permanent injunction, civil penalties, and restitution against Aequitas. The suit says Aequitas holds a portfolio of student loans with an unpaid balance of over $190 million, including more than 46,000 loans made to more than 41,000 borrowers.

“I will continue to seek justice for Corinthian students and hold for-profit colleges accountable. I’m prepared to take any and all action necessary to ensure that all who seek higher education can do so without worrying that their American Dream will be stolen by a so-called educational institution,” Becerra said in a statement.

New York Attorney General Eric Schneiderman also announced $2.4 million in loan relief for his state’s students. He said Aequitas Capital Management preyed on students’ ambition “and schemed with Corinthian to saddle these students with high-default loans at the now-bankrupt college.”

He added, “This was nothing more than a sham that victimized unwitting students and deceived the government and taxpayers.”

Corinthian came undone amid claims it preyed on the poor and vulnerable to boost admissions, and exaggerated students’ job prospects.

The for-profit college urged students to take out expensive loans to cover their tuition, but thousands of students found themselves saddled with debts after they were unable to secure the good-paying jobs the school said its degrees would put within reach.

California obtained a $1.1 billion judgment against Corinthian in state court.

 

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