Consumer Finance Insights
February 2, 2015

CFPB Obtains $480 Million in Student Debt Relief for Corinthian College Students

On February 2, 2015, the CFPB announced that it had reached a settlement with the ECMC Group and the Zenith Education Group (collectively “ECMC”), two companies that had purchased colleges formerly affiliated with Corinthian Colleges, Inc. ECMC agreed to coordinate $480 million in debt relief for current and former Corinthian students, in exchange for a release on liability. ECMC also agreed to stop improper debt collection efforts and to remove negative information from student borrowers’ credit reports. The settlement stems from allegations that Corinthian lured students into enrolling by misrepresenting placement statistics and the extent of career placement services offered; pressured students into accepting high-cost loans that were likely to default; and threatened students who were unable to repay loans with expulsion, pulling them out of classes and withholding course materials.