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KY Corinthian students to receive $790,000 in loan relief

Kentucky one of 13 states in proposed settlement with Aequitas Capital Management

By Terry Sebastian/Crystal Staley

Frankfort, KY - Attorney General Andy Beshear today announced that 120 former Kentucky Corinthian College students will receive more than $790,000 in loan debt relief from a proposed settlement with Aequitas Capital Management.

Beshear joined with 12 states and the U.S. Consumer Financial Protection Bureau on the proposed settlement with a court-appointed Receiver representing the Oregon-based private equity firm and related entities. The settlement ends claims Aequitas enabled the defunct for-profit Corinthian College to take advantage of student borrowers through predatory private student loans.

Beshear said Kentucky students will receive details regarding the relief program within 90 days of the effective date once the proposed settlement is approved by the United States District Court in Oregon, where the Receivership is located.

"Aequitas conspired with Corinthian in creating a scheme designed to defraud Kentucky students and the Department of Education in order to allow Corinthian to continue operating its schools that did little but saddle students with mountains of debt," Beshear said. "This settlement helps the students in Kentucky and across the nation who suffered at the hands of this institution."

Students with active loans will have their principle loan amount reduced by 55 percent and given minimum payment options going forward. The loans of students in default will be forgiven entirely.

Under terms of the settlement, more than 46,000 students nationwide will receive more than $190 million dollars in debt relief.

Beshear's office is committed to holding for-profit colleges accountable in Kentucky and is working to help defrauded students.

In July 2017, Beshear joined 20 other state attorneys general submitting public comments to Education Secretary Betsy DeVos, calling a move by the U.S. Department of Education to replace existing student protections in the Borrower Defense Rule a "waste of resources and a betrayal of students."

In December 2016, Beshear announced nearly 3,500 former students of Daymar College's Kentucky campuses and online programs will receive restitution checks totaling $1.2 million.

In August 2016, Beshear announced that the Kentucky Court of Appeals had affirmed a previous order by Franklin Circuit Court requiring National College of Kentucky Inc. and its attorneys to pay the state a combined $157,000 in civil monetary sanctions. The Kentucky Supreme Court declined in April to take up National College's request to overturn the appeals' court decision. National has now petitioned the U.S. Supreme Court to review the decision.

In March 2016, Beshear joined seven other state attorneys general in asking the U.S. Department of Veterans Affairs to restore educational and vocational benefits to thousands of veterans victimized by Corinthian Colleges Inc. for predatory practices.

Beshear said students who have been a victim of a for-profit college may contact his office by phone, 502-696-5300, or by completing a complaint form.

This story was posted on 2017-08-17 13:47:56
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