Corinthian Fined Nearly $1.2 Billion. Will Students Get Any of It?

old student loan debt

Following lengthy investigations that precipitated its domino-like collapse, Corinthian Colleges was slapped with a massive fine for a slew of illegal practices, including false advertising to students and unlawful debt collection tactics.

The latest judgment handed down from San Francisco Superior Court Judge Curtis E.A. Karnow this week goes on for 21 pages, outlining the ways the now-defunct for-profit education company defrauded students and investors, concluding that Corinthian must pay nearly $1.2 billion in restitution and penalties as a result.

The office of California Attorney General Kamala D. Harris, who had sued the school for various infractions, now has the authority to distribute whatever funds it obtains from the judgment to students who attended Corinthian and its related schools in California from 2010 onward, according to the Los Angeles Times.

The thing is, Corinthian doesn’t have the money to give. The company filed for bankruptcy last year after shuttering the few remaining open campuses on April 27, 2015.

Students who were attending Corinthian schools at that time, including Everest, WyoTech or Heald colleges, have been able to apply for closed school loan discharge from the federal government, though some former students believe more should be done to relieve the debt burdens of hundreds of thousands of people who felt they did not get what Corinthian Colleges promised them.

In a March 25 blog post, activist group the Debt Collective, made up of former Corinthian Colleges students, commented on the judgment and restated its call for the Education Department to automatically discharge affected students’ debt.

On top of taking out expensive loans to pay for an education they say they never received, some borrowers say they have sustained credit damage and employment problems as a result of their time at Corinthian schools. (You can see how your student loans may be affecting your credit scores by viewing your free credit report summary, updated each month, on

The Debt Collective has long argued that requiring borrowers to apply for loan discharge puts the burden of relief on the victims of fraud. In the absence of such a sweeping action, this latest judgment could at least help Corinthian student loan borrowers make their case for relief under the Education Department’s Borrower Defense to Repayment Loan Discharge.

Getting Student Loan Relief

Borrowers can submit a claim to have their federal student loans forgiven if their school “committed fraud by doing something or failing to do something, or otherwise violated applicable state law related to your loans or the educational services you paid for,” according to the Education Department. According to its website, the department is working on creating a process to “make it as easy as possible” for such borrowers to apply for the loan discharge.

You can find details on the current discharge process here. Harris’s office has also set up a website for affected Corinthian students.

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