California Attorney General Xavier Becerra on Thursday announced a new settlement worth 67 million dollars in debt relief for former students of Corinthian Colleges, Inc. Corinthian has done business as Everest, Heald College, and as Wyotech in California.
As a result of the settlement, the remainder of balances on private loans owned by Balboa Student Loan Trust will be wiped away for 34,971 former Corinthian College students in California. Department of Justice officials says some of those people defaulted on their loans, but for those who continued to make their payments, they could receive refunds.
The settlement announcement coming an investigation into Balboa’s debt-collection practices which took about year to complete.
At the end of May the attorney general also began to notify thousands of California residents who attended schools operated by Corinthian Colleges that they may be eligible for cancellation of their federal student loans used to attend those schools.
"All too often, unfortunately, there are unscrupulous players who engage in unscrupulous practices in some of our post-secondary education institutes, and there are lenders in cahoots that do the same thing," Becerra said at the Thursday news conference. He also said Corinthian Colleges, which is now out of business, pushed students into high-interest private student loans and made bogus claims about job placement rates.
According to Becerra, Balboa also sent past due notices to students with loans and threatened legal action if loan were not paid in full, but the company allegedly did that in violation of an agreement in which Balboa executives agreed to limitations on such debt collection.
Most of the California students affected by the settlement live in the Los Angeles are or the Bay Area, but Department of Justice documents show a large number also live in the Sacramento region.