Bankrupt Corinthian Colleges Inc., based in Santa Ana, was ordered to pay $820 million in restitution to its former students, plus civil penalties of more than $350 million, in a judgment handed down Wednesday. The $1.1 billion decision found the company’s advertising practices violated state law.
From at least 2009, many of Corinthian’s claims and ads related to alumni job placement were untrue and/or misleading, according to the judgement issued by San Francisco Superior Court Judge Curtis Karnow.
Corinthian was also faulted for running ads stating it offered ultrasound tech programs, X-ray tech programs, radiology tech programs and dialysis tech programs in California, even though it didn’t, and for engaging in unlawful and unfair debt collection practices, according to the judgment.
Corinthian filed for Chapter 11 bankruptcy last May. Around the same time, the for-profit school operator closed its remaining campuses.
At the time of its bankruptcy filing, the company showed assets of $19.2 million and liabilities of $143 million, according to news reports. Experts say it's unlikely that any of the judgement money will be obtained. But this could help its former students in their efforts to receive forgiveness of their federal student loans. The judgment applies to students who attended Corinthian colleges, as well as students who attended Heald, Everest College, WyoTech, Everest’s online programs and Everest College Phoenix, according to news reports.