70 F
Fort Worth
Wednesday, October 21, 2020
Education Corinthian Colleges sued by US over predatory lending

Corinthian Colleges sued by US over predatory lending

Other News

Toobin suspended by the New Yorker, steps away from CNN

By HILLEL ITALIE AP National WriterNEW YORK (AP) — Author-commentator Jeffrey Toobin has been suspended by the New Yorker and is stepping...

Black officers break from unions over Trump endorsements

By CLAUDIA LAUER Associated PressPHILADELPHIA (AP) — Police unions nationwide have largely supported President Donald Trump's reelection, amid mass demonstrations over police...

Justices to weigh Trump census plan to exclude noncitizens

By MARK SHERMAN and JESSICA GRESKO Associated PressWASHINGTON (AP) — The Supreme Court agreed Friday to take up President Donald Trump's policy,...

Gov. Greg Abbott picks Rebeca Huddle for Texas Supreme Court vacancy

By Emma Platoff, The Texas Tribune Oct. 15, 2020 "Gov. Greg Abbott picks Rebeca...
Robert Francis
Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

Andrew Harris (c) 2014, Bloomberg News.

CHICAGO — Corinthian Colleges, the for- profit education company winding down its operations, resorted to predatory lending techniques and “strong arm” collection tactics to collect from students it misled about job prospects, a U.S. agency said in a lawsuit.

“Corinthian lured tens of thousands of students to take out private loans to cover expensive tuition costs by advertising bogus job prospects and career services,” the Consumer Financial Protection Bureau said Tuesday in a statement. “Corinthian then used illegal debt collection practices to strong-arm students into paying back those loans while still in school.”

Claiming those actions violated federal debt collection laws, the CFPB asked a Chicago federal court on Tuesday to bar the alleged practices and order restitution to borrowers harmed. Corinthian fell more than 30 percent to a 52-week low of less than 10 cents per share in Nasdaq trading. The company has lost almost 95 percent of its value in the past year.

Over the past three years, Corinthian made 130,000 loans, totaling almost $569 million, to students who couldn’t afford its tuition, according to the complaint. Corinthian, which had about 72,000 students as recently as July, agreed to a U.S. government plan to close or sell its 107 campuses in the U.S. and Canada.

The company has been fending off allegations by several states that it falsifies job placement and marketing data.

The CFPB raised similar claims in its complaint, accusing the company of inflating placement statistics as it “deflated the number of graduates who were ‘available for employment.'”

The Santa Ana, Calif.-based company said in a statement that it “strongly disputes” the CFPB claims. The agency wrongfully disparaged Corinthian’s career services assistance and mischaracterized its Genesis student loan program, a subject of the regulator’s complaint, according to the statement.

“The complaint ignores clear, easily obtainable evidence that thousands of Corinthian graduates are hired into permanent positions by large and small employers across the U.S. every year,” the company said, claiming the agency cited isolated incidents that Corinthian had disclosed and taken steps to cure.

It also described the Genesis loan program as supplemental financial assistance used by less than 40 percent of its students at a cost of about $35 per month.

“We ask students to make payments while in school to help them develop the discipline and practice of repaying their federal and other loan obligations,” Corinthian said.

The case is Consumer Financial Protection Bureau v. Corinthian Colleges Inc., 14-cv-7194, U.S. District Court, Northern District of Illinois (Chicago).

Corinthian operates four Everest College campuses in North Texas, including two in Fort Worth and one in Arlington. It has said it plans to close or sell the schools.

With assistance from Margaret Cronin Fisk in Detroit, Janet Lorin in New York and Chris Staiti in Boston

Latest News

5 takeaways from the government’s lawsuit against Google

By The Associated Press WASHINGTON (AP) — The Justice Department's lawsuit against Google alleging antitrust violations marks the government's most significant attempt...

McConnell warns White House against COVID relief deal

lBy ANDREW TAYLOR Associated PressWASHINGTON (AP) — Washington negotiations on a huge COVID-19 relief bill took a modest step forward on Tuesday,...

GM Financial donates 100,000 face masks to Fort Worth and Arlington school districts

Fort Worth-based GM Financial is helping thousands of North Texas students, teachers and staff members have a fresh disposable face mask to...

City of Arlington Announces five finalists for police chief

The City of Arlington has named five finalists in its search for a new police chief in a search that began June...

National Democratic super PAC says it will double its spending to $12 million in battle for the Texas House

By Patrick Svitek, The Texas Tribune Oct. 20, 2020 "National Democratic super PAC says...