Lake Oswego lender to pay $192 million to defrauded former students
SALEM - Several state attorneys general have reached a $192 million settlement with an Oregon-based lender that financed $400 million in student loans for now-bankrupt Corinthian Colleges.
Lake Oswego-based Aequitas Capital financed more than $400 million in private loans to students attending the failing for-profit college system.
About $2.1 million of the settlement amount goes to 683 Oregonians to help eliminate or reduce their loan debt.
Out of that number, 358 will receive 100 percent loan forgiveness, and another 325 will see a 40 percent principal reduction for their loans, according to the Oregon Department of Justice.
"Here in Oregon, more than 650 students took out considerable loans to attend Corinthian Colleges, largely based on their slick promises of high paying jobs upon graduation. This deal can now help these young people move on from a terrible chapter in their lives, without being stuck with the obligation of a lifetime," said Oregon Attorney General Rosenblum. "I am very pleased that the Oregon Department of Justice was one of the lead settlement negotiators."
The agreement, which Oregon DOJ collaborated with several other states and the Consumer Financial Protection Bureau, is contingent on approval by a federal judge.
The settlement will cancel all outstanding balances for former students who have both fallen into default and whose campuses were closed due to the Corinthian bankruptcy. Otheres will receive a write-down of 55 percent on outstanding loan principal. As part of the deal, former students will have any negative reporting associated with the loans' repayment erased from their credit reports.