For-Profit College Faces $500 Million Lawsuit Over ‘Predatory Lending Scheme’

Career College Central Summary:

  • Corinthian Colleges is being sued by the federal Consumer Financial Protection Bureau for what it calls a "predatory lending scheme."
  • The CFPB is seeking more than $500 million for borrowers who used the for-profit education company's private student loans.
  • Corinthian misled students about their job prospects, in some cases paying employers to offer temporary jobs to graduates, the agency said Tuesday.
  • Corinthian 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, the CFPB said.
  • More than 60 percent of Corinthian students with those loans defaulted within three years. 

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BUSINESS INSIDER

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