The announcement marks the largest group of borrowers to be offered debt relief since the Education Department began to sort through evidence a year ago to determine which Corinthian students deserve to have their loans forgiven. It ordered that restitution be paid in the amount of $820,000,000 to students and that $350,025,000 be paid in civil penalties, for a total of $1,170,025,000 in monetary relief.
Advertisement
Harris’ office has the authority to distribute whatever funds it obtains from the judgment to students who attended Corinthian and its related schools in California from 2010 onward.
“(The judgment) is yet another admission that this is a deeply flawed company and the fact that it’s not around to pay this anymore stresses the importance of upfront protections for students”, Miller said.
The Attorney General filed many of these documents in Court before entry of the Court’s judgment, and they are now publicly available. The placement rates that CCI published were systematically false, misleading, erroneous and/or failed to comply with applicable state and federal regulations and/or accreditor standards. In addition, the government approved more than $90 million in forgiveness to 6,838 borrowers through a closed-school discharge, a process that allows borrowers to have their debts wiped away if their school closes and they can’t finish their program.
CCI’s enrollment agreements contained unlawful clauses. While critics are demanding collective debt relief, the government is sorting through thousands of individual claims.
CCI misrepresented its financial stability to students. In June 2015, after calls from Attorney General Harris for substantive relief for students suffering from crippling debt, the U.S. Department of Education announced expanded debt relief options for Corinthian students, which resulted in many more students being eligible for relief.
San Francisco Superior Court Judge Curtis Karnow said Corinthian Colleges Inc. of Santa Ana, which owned Heald College and the heavily advertised Wyotech technical schools, had deliberately misled students and improperly tried to recoup student debt.
The department’s move falls short of calls by consumer advocates to instantly and automatically forgive all Corinthian students’ debts, without requiring even a form to be filled out.
In the wake of massive and systemic fraud by Corinthian that led to the company’s eventual shutdown, the department had granted automatic forgiveness only to small batches of former students: first those who had attended one of its smaller chains and then to students from a single state, California.
Advertisement
This article was released by the Office of the California Attorney General.
