Corinthian Colleges sued for predatory lending
WASHINGTON (AP) — Corinthian Colleges is being sued by the federal Consumer Financial Protection Bureau for what it calls a "predatory lending scheme."
The CFPB is seeking more than $500 million for borrowers who used the for-profit education company's private student loans. The CFPB says that Corinthian misled students about their job prospects, in some cases paying employers to offer temporary jobs to graduates.
The agency also says Corinthian charged as much as $75,000 for a bachelor's degree and pushed students into private loans with interest rates of roughly 15 percent, more than double the rate for a federal loan.
The agency says that more than 60 percent of Corinthian students with those loans defaulted within three years.
Shares of Corinthian Colleges Inc., based in Santa Ana, California, plunged almost 30 percent Tuesday.