Federal court finds Corinthian College liable for $530M

Corinthian College is liable for scamming students out of $530 million before its collapse earlier this year, a federal district court ruled this week.

The U.S. District Court for the Eastern Division of Northern Illinois issued a default judgment in favor of the Consumer Financial Protection Bureau (CFPB), which sued the for-profit school on Sept. 16, 2014 for luring tens of thousands of students into taking out private loans, known as “Genesis loans,” to cover expensive tuition costs by advertising bogus job prospects and career services.

CFPB said the school then used illegal debt collection tactics to strong-arm students into paying back those loans while still in school.

Despite the judgement, which was handed down Tuesday, CFPB said victims will not be receiving any relief. Corinthian College filed for bankruptcy earlier this year and all of its assets have already been distributed.

In a news release, CFPB Director Richard Cordray said the agency still has more work to do before current and past students who were hurt by Corinthian’s illegal practices can be made whole.

“We remain deeply concerned about risks facing student borrowers in the for-profit space and will continue to be vigilant in rooting out harmful practices,” he said.