Former Corinthian College Students Seek To File $2.5B Claim Against Bankrupt For-Profit Operator

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Former students of now-defunct for-profit education chain Corinthian Colleges continued their fight to recoup the money they spent on classes at the company’s Heald College, WyoTech or Everest University campuses, filing a $2.5 billion claim against the bankrupt educator.

The claim, which represents expenses, fees and lost wages for about 500,000 students, would cover any individual who attended one of the company’s campuses between 2000 and 2015, the Wall Street Journal reports.

Lawyers estimate that individual losses for the students range between $10,000 and $100,000.

If the bankruptcy court allows the joint claim to move forward, lawyers say it would alleviate concerns that some individuals had not received proper notification about their right to file a claim in the pending bankruptcy case.

According to the WSJ, the deadline for filing a claim was July 20, and at that time just 2,150 students had filed individual claims.

The claim is based on students’ allegations that they were misled by

CCI and deceived into paying costly tuition for what equates to be a worthless education. The company has previously denied any wrongdoing.

California-based CCI, once one of the largest for-profit college chains in the country, has been at the center of numerous federal and state investigations and lawsuits  and began its downward spiral last summer after agreeing to sell or close a majority of its campuses in a deal with the Department of Education.

Since that time, CCI has faced several other issues including being delisted from Nasdaq and notice from the California Student Aid Commission that it would halt grants to CCI students. Both of those moves came after the company failed to submit required financial statements to both the Securities and Exchange Commission and the student aid commission.

The company’s downward spiral concluded in April when it announced it would close its remaining campuses. The next month the company filed for bankruptcy, leaving hundreds of thousands of student holding hundreds of thousands of dollars in worthless student loan debt.


Category: Bank

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