Can the government make a for-profit school tear up its private student loan promissory notes? We’re about to find out.
The Consumer Financial Protection Bureau filed suit this week against Corinthian Colleges for alleged misconduct relating to its private loan program, called Genesis. While lawsuits against Corinthian, which operates Heald, Wyotech and Everest, abound, something about this particular suit caught my eye.
The CFPB is asking the court to “order the rescission of all Genesis loans”. In plain English: the government is asking a federal court to cancel all of the notes on at least 170,000 private student loans, with a combined balance of $568.7 million. As in, tear them up. Poof. Make them gone, as though they had never existed. Continue reading