On Monday, California Attorney General Edmund G. Brown Jr. announced that the Corinthian Schools, Inc. and Titan Schools, Inc. would pay the amount of $6.5 million as a lawsuit settlement. This amount includes a $5.8million amount for consumer restitution. The lawsuit involves allegations that the profit-oriented vocational schools have engaged in unlawful or illegal business practices, particularly false advertising. The lawsuit alleged that the vocational schools have presented inaccurate employment and salary information to its students.
Los Angeles, CA -- (ReleaseWire) -- 08/28/2007 -- In the complaint, it was noted that the students of the Corinthian school paid from $7,000 to $27,000 for the vocational courses being offered. These courses usually take about six months up to one year to fully complete.
The students alleged that the Corinthian had overstated the percentage of student who has obtained employment from such courses. It also inflated the information for starting salary and used these inaccurate facts to persuade prospective students to register in the school.
With this, the students who have enrolled found themselves paying their tuition fees through combined ways like private loans, taxpayer-subsidized loans, and government grants that are arranged for them by Corinthian.
According to California Attorney General Brown, the students of Corinthian were expecting that the tuition payments they made would come up with attractive job opportunities, as promised by the company. However, their high expectations come tumbling down as many among them came up unemployed, still with piling debts.
The complaint filed by the students alleged that Corinthian practiced in further unfair, illegal and / or fraudulent business practices and acts. Allegedly, they falsified records presented to the state government, offered vocational programs which failed to comply with the minimum standards for a student to complete the course and find employment, consequently.
The Corinthian was also accused of using provisions in settlement contracts that prevented the former students to reveal any matter concerning their arguments with the Corinthian administration to the various government authorities.
Brown put forward the agreement resolution to the Los Angeles County Superior Court. He also included the lawsuit the settlement had resolved.
The settlement is presently pending for judicial approval. It provides $5.8 million in restitution for the students. From this amount, $1.5 million is intended for debt cancellation. $4.3 million will be given as a form of refund to Corinthian's former students.
The settlement also provides a $700,000 worth of payment for civil costs and penalties.
The California attorney general stated that the settlement is a groundbreaking act to that offered fair restitution and justice to the students. It also obtains the commitment of Corinthian to reform its education practices in the coming days.
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