The Consumer Financial Protection Bureau announced on Tuesday that the new owner of more than 50 campuses
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The Consumer Financial Protection Bureau announced on Tuesday that the new owner of more than 50 campuses formerly owned by the for-profit Corinthian Colleges will pay at least $480-million in debt relief to current and former Corinthian students. The new owner, the ECMC Group, has also agreed not to offer a private student-loan program for seven years, and to adopt new policies aimed at consumer protection, among other things.
Last year the bureau sued Corinthian Colleges, alleging the company had practiced predatory lending and illegal collection tactics, among other things. Tuesday’s announcement releases ECMC from potential liability for the allegedly illegal activity by Corinthian.
“Today’s action will provide substantial relief to current and past students who were harmed by Corinthian’s predatory lending scheme,” said the bureau’s director, Richard Cordray, in a written statement. “These consumers were lured into high-cost loans destined to default, and then targeted with aggressive debt-collection tactics. We will be vigilant to ensure that consumers receive this important relief and that others are protected in the for-profit college industry.”
Corinthian’s downfall came swiftly last year, prompted by stricter financial oversight from the U.S. Department of Education. In July it reached an agreement with the department to sell the vast majority of its campuses and “teach out” the others.
