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Santa Ana vocational school operator Corinthian Colleges Inc. has launched a $450 million student loan program.
The program will be offered through a partnership with ASFG LLC starting year, and available over a two-year period.
Corinthian operates more than 100 campuses under the Everest, WyoTech and Heald College brands throughout the U.S. and Canada.
The company counts about 100,000 students in associate degree programs in healthcare, information technology and other industries.
Loans administered under the new program will be sold back to ASFG from the lender.
Corinthian had been buying student loans under an existing program established in 2008.
As part of the deal struck with ASFG, Corinthian sold its current portfolio of student loans to ASFG for $24 million.
“We began our internal student lending program in 2008 when the credit crisis made it virtually impossible for students to find gap financing,” Corinthian Chief Executive Jack Massimino said in a statement. “Our program provided an essential service for students, but it was not our intention to remain a lender over the long term.”
The ASFG loan program helps Corinthian comply with a federal law—known as the 90-10 rule—which requires private colleges to pay at least 10% of their education costs from sources other than federal student aid programs.
The Education Department had been considering more than a dozen regulations related to loan repayments and student debt levels that could have potentially crippled Corinthian and others.
New regulations issued last month were not as harsh as feared, giving school operators until 2015—instead of 2012—to be in compliance.