A federal judge has ruled that the defunct Corinthian Colleges is liable for roughly $530 million in damages to former students, concluding a lawsuit brought by the Consumer Financial Protection Bureau a year ago. According to the judge’s order, Corinthian deceived students by misrepresenting their career prospects, among other things.
Corinthian, which filed for bankruptcy in May, must pay the money into a fund from which it will be distributed to former students by the bureau, according to the order, issued on Tuesday by Judge Gary S. Feinerman of the U.S. District Court in Chicago.
The bureau sued the company in September 2014. That was after stricter oversight by the U.S. Education Department prompted the company to shut its doors and agree to sell a majority of its campuses. Former students petitioned the federal government this year for easier access to refunds for tuition paid at Corinthian campuses.
“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,” said the bureau’s director, Richard Cordray, in a written statement. “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.”
If could not immediately be determined if officials managing Corinthian’s bankruptcy had a response to Tuesday’s ruling, if an appeal was under consideration, or if the company had sufficient assets to pay such a judgment.
