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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Corinthian Colleges accused of predatory lending

From Wire Reports

WASHINGTON – Corinthian Colleges is being sued by the federal Consumer Financial Protection Bureau for what it calls a “predatory lending scheme.”

The CFPB is seeking more than $500 million for borrowers who used the for-profit education company’s private student loans. Corinthian misled students about their job prospects, in some cases paying employers to offer temporary jobs to graduates, the agency said Tuesday.

Corinthian charged as much as $75,000 for a bachelor’s degree and pushed students into private loans with interest rates of roughly 15 percent, more than double the rate for a federal loan, the CFPB said. More than 60 percent of Corinthian students with those loans defaulted within three years.

Kent Jenkins, a Corinthian spokesman, disputed the claims made by the CFPB.

Jenkins said the suit is based on “isolated incidents” at Corinthian’s campuses regarding job placement. He said that the interest rate on its private loans averages 9 percent, instead of the 15 percent cited by the government. Corinthian requires that students repay the loans while attending class, having them pay an average of $35 a month.

“We ask students to make payments while in school to help them develop the discipline and practice of repaying their federal and other loan obligations,” Jenkins said.

Small truck demand prompts hires at GM

DETROIT – Early demand is so high for General Motors’ new small pickup trucks that the company is hiring more workers to build them even before one is sold to the public.

Nearly 100,000 prospective buyers have gone online to customize a Chevrolet Colorado or a GMC Canyon pickup and get a price. That, and 30,000 advance orders from dealers, is a sign of strong demand, GM said Tuesday.

GM plans to add 750 workers around March to staff a third shift at its plant in Wentzville, Missouri, west of St. Louis.

WASHINGTON – The Social Security Administration has resumed mailing statements to workers letting them know the estimated benefits they will get when they retire.

The agency stopped mailing the statements to most workers two years ago to save money. Instead, Social Security directed workers to track their future benefits online using a secure website.

Congress, however, passed a bill last year requiring Social Security to resume mailing the statements.

The agency said Tuesday that many workers will now start receiving the paper statements every five years. Once workers reach 60 they will get them every year.