Feds Get $480 Million in Relief for Corinthian College Students
By Consumers Union on Thursday, February 5th, 2015
This week brought big news for students who’ve attended the infamous Corinthian Colleges, which operate under the names Heald, WyoTech and Everest. The Consumer Financial Protection Bureau (CFPB) and the Department of Education announced a $480 million deal with ECMC, the company that’s buying up several Corinthian campuses, to bring immediate relief to past and current students who were steered into taking out expensive private loans to pay for their high tuition rates.
Under the agreement, current and former students will now see an immediate 40 percent reduction in the amount that they owe on those private loans. Eligible borrowers will be notified of the loan forgiveness and automatically receive the relief.
ECMC has also agreed to a series of new consumer protections, and it will not operate a private student loan program for seven years. Meanwhile, Corinthian isn’t off the hook: the CFPB is still suing Corinthian for $500 million over its aggressive and risky private lending program.
We think this is an important first step to undoing the harms that students experienced at Corinthian campuses. However, we still have major concerns about ECMC, which is a debt collection company with no experience running a school. It may be no better for students than just letting the campuses close – in that case, students can at least get their federal loans discharged.
Clearly, there’s more work to do to make sure that students can get a high-quality education that doesn’t drain their future earnings. We’ll be pushing the government to do more to prevent shoddy career colleges from harming students like this in the first place!
For more information on what this deal means for past and current Corinthian students, check out the CFPB bulletin here.
Have you attended a career college program? What was your experience? Share your story with us.