News reports said a proposed class of shareholders suing Corinthian Colleges Inc. have reached a $2.25 million deal in California federal court to settle claims that the operator of for-profit colleges misled investors for years before state and federal probes contributed to its closure.
Corinthian was based in Santa Ana and at its apex ran 118 vocational and technical schools with 110,000 students in the U.S. and Canada, according to news reports. It’s accused in dozens of lawsuits of taking advantage of former students with misleading post-graduation job placement rates, the news reports said.
Corinthian in March 2016 was ordered by a San Francisco Superior Court to pay $820 million in restitution to students and $350 million in civil penalties in a judgment that said its practices violated state law.
The company filed for bankruptcy protection in May 2015 with assets of about $19 million and liabilities of about $143 million.
The cloud over Corinthian could have a silver lining for thousands of its former students: debt forgiveness. California this week began an effort to let thousands of former Corinthian students they may be eligible for cancellation of their federal student loans.