On August 24, 2017, Texas Attorney General Ken Paxton announced a settlement with the now defunct private investment firm Aequitas. The settlement will provide more than $17 million in debt relief for Texas residents, who attended schools operated by Corinthian College. The Oregon federal court, which is overseeing the Aequitas receivership, first approved the settlement. The $17 million is a small portion of the $192 million that has been granted to students across the nation.
After a multi-state investigation, it was discovered that Aequitas had entered into a complex financial relationship with Corinthian to provide funding to the Genesis Private Student Loan Program. This program gave Corinthian the ability to pretend it was in compliance with federal law, while engaging in deceptive practices toward borrowers that were unaware of the scheme or risks involved with the loans.
Attorney General Paxton made a statement about the settlement. “Students are among Texas’ most valuable resources and my office will act to protect them from deceptive practices. This settlement provides relief to Texans victimized by a student loan program that took advantage of their aspirations to further their education.”
In total, 13 states took part in the settlement. Before Corinthian was shutdown, it operated under the name Everest College in Texas. The company had campuses in Austin, Houston, San Antonio, and Dallas.