Forprofit colleges case settled for more than 192M

first_imgAequitas Capital Management will offer about 2,000 Washington students — including some in Vancouver — more than $7 million in debt relief after it participated in predatory lending practices, according to an announcement by the Washington Attorney General’s Office.The Lake Oswego, Ore.-based company must forgive the loans of 1,241 students who defaulted on their loans, totaling more than $5 million in relief, according to the news release. Another 717 borrowers whose loans are still active will see their outstanding balance reduced by 55 percent, worth more than $2 million. Aequitas will forgive the loans of some Washington borrowers whose campuses closed, as well. The 13-state settlement will see Aequitas pay out more than $192 million to students in total.The announcement brings to a close about three years of legal wrangling for the investment firm, which provided financing and liquidity to Corinthian Colleges students. The for-profit Corinthian chain owned and operated seven Everest College campuses in Washington, including one in Vancouver, until February 2015, when Zenith Education Group purchased the assets. Zenith announced the Vancouver campus’ closure in December 2015, consolidating that campus and the Portland campus at its Tigard, Ore., location. The Vancouver campus at the time served 120 students, according to Columbian archives.It’s unclear how many Vancouver students will be affected by the settlement. A spokeswoman with Attorney General Bob Ferguson’s office said the office doesn’t have a breakdown of where affected students are located or how much money they may be entitled to.“Aequitas exploited the broken promises that Corinthian made to Washington students,” Ferguson said in the announcement. “These student borrowers deserve relief.”Aequitas made more than $500 million in private loans to students at the college, according to the news release. Through its affiliate, Campus Student Funding, Aequitas bought the loans from Corinthian for about half the initial value, allowing the company to make a significant profit on repaid loans. Corinthian agreed to buy back any loans more than 90 days delinquent, protecting Aequitas from financial risk if the loans defaulted.last_img

Leave a Reply

Your email address will not be published. Required fields are marked *