STUDENT LOAN PREDATORY LENDING SCHEME

Student Loan Debt informational blog by Constance d’Angelis, Esq.

STUDENT LOAN PREDATORY LENDING SCHEME enabled by Private Equity Firm

SEC shuts down PRIVATE EQUITY firm for defrauding 1,500 investors.

• Consumer Finance Bureau and 7 States Attorneys General sue PRIVATE EQUITY firm.

• Proposed Settlement $183.3K for 41,000 harmed Student Borrowers.

• Private Equity Firm (Aequitas Capital Management, Inc. & related entities – Lake Oswego, Oregon) purchased or funded about $230K Corinthian Colleges’ private loans.

• Aequitas and Corinthian plotted together.

• Corinthian payed Aequitas  to engage in charade that school had enough revenue to qualify for federal loan dollars.

• Both school and private equity firm knew most Corinthian student borrowers would default.

• Settlement – if approved by U.S. District Court in Oregon – required to:
• Forgive loans to eligible borrowers
• Forgive loans in default
• Reduce other loans by more than half

A copy of the CFPB’s complaint can be found at: http://files.consumerfinance.gov/f/documents/201708_cfpb_aequitas-complaint.pdf

A copy of the proposed settlement can be found at: http://files.consumerfinance.gov/f/documents/201708_cfpb_aequitas-proposed-settlement.pdf