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CFPB Announces Loan Forgiveness for Private Student Loans

Loan Forgiveness for Private Student Loans

Los Angeles, CA.
February 6, 2015

The Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Education (USDE) announced Tuesday, February 3rd, that it will be providing $480 million in private student loan forgiveness for borrowers who took out loans from Corinthian College. These federal agencies are correcting a massive predatory lending scheme conducted by Corinthian College. CFPB Director Richard Cordray says, “These consumers were lured into high-cost loans destined to default, and then targeted with aggressive debt collection tactics. We will be vigilant to ensure that consumers receive this important relief and that others are protected in the for-profit college industry.”

As part of the agreement, the new owner of a number of the Corinthian schools — ECMC — will cease its private student loan program for seven years and will abide to a set of consumer protection regulations. This issue stems from November of last year, when the ECMC Group worked with the federal government to find an agreement to take over many of the Everest and WyoTech campuses, which were owned by Corinthian Colleges, Inc. — a major for-profit college company that operated more than 100 schools.

However, this issue is not isolated to Corinthian College. There are many more examples of students who took out high interest private student loans that cannot afford to repay them. If you are burdened private students loans, contact a qualified debt settlement attorney and learn more about your options.

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Kevin Fallon McCarthy is the McCarthy Law PLC’s managing attorney and an experienced Phoenix debt attorney. Mr. McCarthy has also worked as general counsel for a large corporation. He has corporate counsel experience in human resource matters, general corporate governance, and union class action litigation.