Students At Corinthian Colleges Will Have Loans Forgiven
RENEE MONTAGNE, HOST:
And federal officials have reached a deal with the for-profit Corinthian Colleges. We first told you about the collapse of the Corinthian network last summer. Now Corinthian students will be forgiven $480 million in private loans. NPR's Sam Sanders has the story.
SAM SANDERS, BYLINE: For years, Corinthian targeted students with aggressive ads like this one.
(SOUNDBITE OF AD)
UNIDENTIFIED MAN: You're sitting on the couch. You're watching TV. And your life's passing you by. You keep procrastinating over and over. Well, maybe I'll go to school next year or maybe next semester. No, do it right now...
SANDERS: That one was for Everest College, one of the schools in the Corinthian network. The ads worked, but not all is well for Corinthian.
SUZANNE MARTINDALE: The saga of Corinthian College is quite long and storied to say the least.
SANDERS: That's Suzanne Martindale, a lawyer with the Consumers Union. She says for years, federal officials have had their eyes on the schools. They claim Corinthian led low-income students into massive debt. And many graduates only found low-paying jobs if they graduated at all. In early 2014, the Department of Education asked for school records. When Corinthian didn't fully comply, the Department of Ed put a three-week hold on financial aid payments.
MARTINDALE: That alone put Corinthian near bankruptcy.
SANDERS: Then, in July, Corinthian agreed to sell or shut down. At the same time, the Consumer Financial Protection Bureau was going after Corinthian too. And they helped reach the $480 million loan forgiveness deal. The CFPB claims Corinthian pushed students into high-interest private loans on top of federal loans. Corinthian told NPR that those claims are unfounded, and the company will fight them in court. This loan agreement means eligible students could see a 40 percent reduction in private loans, and their credit scores could improve. Students will also no longer be threatened with legal action. The agreement allows many Corinthian campuses to be sold to the ECMC Group. But Martindale says that sale might not make things better.
MARTINDALE: ECMC has never run a college before. And so we have grave concerns still.
SANDERS: ECMC Group is, in fact, a student debt collection agency. Sam Sanders, NPR News. Transcript provided by NPR, Copyright NPR.