Feds Sue Corinthian Colleges For Allegedly Predatory Loan Scheme

Things are looking decidedly worse for Corinthian Colleges Inc. The Consumer Financial Protection Bureau filed a lawsuit against the already under-fire for-profit education company for its allegedly illegal predatory lending scheme.

According to the complaint [PDF], CCI lured tens of thousands of student at Heald College, Everest University and Wyotech to take out private student loans to cover expensive tuition costs by advertising bogus job prospects and career services.

The company then allegedly used illegal debt collection tactics to strong-arm students into paying back those loans while still in school.

To protect current and past students of the Corinthian schools, the Bureau is seeking to halt these practices and is requesting the court to grant relief to the students who collectively have taken out more than $500 million in private student loans.

These aren’t the first allegations of predatory practices to be lobbed at CCI. Just last month the company announced it was being subpoenaed in a possible criminal investigation.

Earlier this summer, the school reached a deal with the Department of Education to close or sell a number of its campuses. At the time, several current and former students and employees told Consumerist about the misdeeds of the for-profit company.

The company is still under investigation by state and federal entities. The California Attorney General filed a lawsuit against the company in October for its shady dealings.

by Ashlee Kieler via Consumerist