In September 2014, the CFPB filed a lawsuit against Corinthian Colleges alleging the for-profit colleges engaged in a “predatory lending scheme” by misleading “students about their job prospects.” In addition, the CFPB said Corinthian applied exorbitant interest rates to their student loans, which students were forced to begin paying while enrolled in classes, and employed “aggressive debt collection practices.”

• “The Santa Ana, California-based company” owns “Everest College, Heald College and WyoTech schools.” As of March 2014, “74,000 students were enrolled at the company’s campuses.” [Josh Boak, Corinthian Colleges sued for predatory lending, The San Diego Tribune, 09/16/14; Rachel Witkowski, “CFPB Targets Lending Program at For-Profit School”, Payments Source, 09/16/14]

• The for-profit college “charged as much as $75,000 for a bachelor’s degree and pushed students into private loans with interest rates of roughly 15 percent, more than double the rate for a federal loan.” Corinthian “inflated tuition costs to more than five times the cost of similar education programs at public colleges.” The number of students who defaulted on their loans “within three years” exceeded 60 percent. Corinthian preyed upon students from low-income households, comprising a majority of their student body, who were compelled by the non-traditional loans provided by the company. [Josh Boak, Corinthian Colleges sued for predatory lending, The San Diego Tribune, 09/16/14; Rachel Witkowski, “CFPB Targets Lending Program at For-Profit School”, Payments Source, 09/16/14]

• Students were required to begin paying back their loans while still attending school, “having them pay an average of $35 a month.” A Corinthian spokesman justified this practice, saying this system helped students “develop the discipline and practice of repaying their federal and other loan obligations.” The “aggressive debt collection practices” alleged in the lawsuit included the company “having campus staff pull students out of class or block them from registering for new classes.” [Josh Boak, Corinthian Colleges sued for predatory lending, The San Diego Tribune, 09/16/14; Rachel Witkowski, “CFPB Targets Lending Program at For-Profit School”, Payments Source, 09/16/14]

• The CFPB accused Corinthian Colleges of “paying employers to offer temporary jobs to graduates” to make their job placement rates appear higher than they are in reality. Additionally, they falsely claimed that provide “career counseling services” that were never offered to students. [Josh Boak, Corinthian Colleges sued for predatory lending, The San Diego Tribune, 09/16/14; Rachel Witkowski, “CFPB Targets Lending Program at For-Profit School”, Payments Source, 09/16/14]