As part of an agreement with the federal government, Corinthian Colleges — which previously owned Everest — sold most of its schools to Education Credit Management Corp. ECMC has agreed to take steps to compensate former Corinthian students for some of their losses.
The key financial block is $480 million, which will be reimbursed to tens of thousands of Corinthian students who attended between 2011 and late 2014.
“That $480 million is substantial and immediate,” said Lauren Asher of The Institute for College Access and Success. “In addition to having their monthly debt payments reduced by as much as 40 percent, those borrowers will see the dark marks on their credit reports removed, if they’re related to those bad loans.”
As Corinthian has been systematically dismantled, it’s been forced to forgive some private student loans it lured students into taking. But so far the federal government has taken no measures to address the federal student loans taken out by Corinthian students, which Inside Higher Ed estimates to be more than half a billion dollars. As part of the deal for Corinthian Colleges to sell half of its campuses to ECMC Group, the CFPB won a battle in seeking a $480 million write off of Corinthian’s private Genesis loans for student borrowers. According to CFPB director Richard Cordray it “was a tremendously successful result for many thousands of young people and their families that had been seriously harmed by Corinthian’s deceptive marketing.”
This $480 million however, just covers the Genesis loans, not the federal loans Corinthian students borrowed from the Department of Education. The 15 students and their advocates claim that since Everest, Heald and WyoTech were purveyors of almost worthless credentials, these loans should also be forgiven. Luckily for students, due to an extension of the programs initiated under President Obama, there is room for more students to get into the available forgiveness programs. If you would like to see if you qualify for one of these programs, you can give us a call at (800) 940-8911.