BOSTON – Campus Student Funding, a subsidiary of Oregon-based Aequitas Capital Management Inc., has agreed to discharge $121,000 in private loans and return recent payments from Massachusetts students of Corinthian Colleges Inc., which operated two for-profit schools in Massachusetts under the name Everest Institute, Attorney General Maura Healey announced today.
Under the terms of the settlement, filed in Suffolk Superior Court, Campus Student Funding has also agreed to repair negative credit reporting associated with these loans.
“Corinthian was a predatory for-profit school that broke Massachusetts law by aggressively recruiting students and failing to deliver the education and career opportunities it promised,” AG Healey said. “Today’s settlement will help Massachusetts students get out from under the crushing debt Corinthian caused.”
In 2014, the AG’s Office filed a lawsuit alleging that Corinthian violated the state Consumer Protection Act by misrepresenting the likelihood of job placement to Massachusetts consumers in order to induce enrollment. The lawsuit also alleged that Corinthian created a private student loan program known as the Genesis program, and steered students into these loans even though Corinthian knew or should have known that students would be unable to repay the loans. Suffolk Superior Court entered final judgment against the Corinthian in the amount of $86 million, and the AG’s Office has since undertaken successful efforts to extinguish $1.4 million in Genesis loans and other Corinthian debt, including those loans held by Campus Student Funding.
While litigating against Corinthian, the AG’s Office also petitioned the U.S. Department of Education to provide federal loan relief for defrauded Corinthian students. In 2016, the Department announced findings of fraud by Corinthian at a press conference with Attorney General Healey, and invited students to apply for borrower defense for repayment of their federal student loans. The AG’s Student Loan Assistance Unit subsequently held dozens of workshops to help defrauded students apply to discharge their federal loans. As of August 2017, approximately 1,300 Massachusetts students have obtained federal loan relief.
The AG’s Office remains committed to seeking relief for students affected by Corinthian’s unfair practices. In December 2017, the AG’s Office filed a multi-state lawsuit alleging that the U.S. Department of Education under the Trump administration has wrongfully garnished wages, intercepted tax refunds and offset social security benefits of certain Corinthian borrowers, even though the Department had previously made findings of fraud against the Corinthian.
Massachusetts Corinthian students who are eligible for private loan relief under today’s settlement will be contacted by the AG’s Office.
Anyone with questions about this settlement or complaints about their Corinthian private loans can contact the Attorney General’s Student Loan Assistance Unit at 1-888-830-6277 or file a complaint at http://www.mass.gov/student-loan-assistance.
This matter was handled by Assistant Attorney General Jennifer Snow, with assistance from Legal Analyst Drew Tobias and Paralegal Michael Beaulieu, all of AG Healey’s Insurance and Financial Services Division, and Investigator Kristen Salera of AG Healey’s Civil Investigations Division.