A California judge ordered a now-defunct for-profit college chain to pay more than $1 billion Wednesday over claims the company misled students and investors.
The judgment is the latest step in a suit filed against Corinthian Colleges and its California subsidiaries by California Attorney General Kamala Harris in 2013. In themore than 20 page document, Judge Curtis Karnow ordered the school to pay $820 million to affected students and more than $350 million in civil penalties.
It’s unlikely former students will get that money from Corinthian’s pockets, though. The company filed for bankruptcy in May and listed assets of $19.2 million. A judge later approved a plan for the company to liquidate its assets.
But the judgment could help students in another way, said Ben Miller, the senior director for postsecondary education at the Center for American Progress, a left-leaning think tank. It could serve as evidence of Corinthian’s wrongdoings for former students who are applying to the federal government to have their loans forgiven because they believe the school violated state law, he said.
“It would seem like if there are programs within California that didn’t have sufficient evidence for borrower discharge yet, I would think this judgment gives what’s necessary,” he said.