Corinthian Colleges student agreement suspends actions for 120 days

By Caroline Salls

Pittsburgh, July 13 – The Corinthian Colleges, Inc. special student committee reached an agreement with the United States Department of Education to work on a strategy that will provide relief and assistance for all former Corinthian students impacted by the school’s Chapter 11 bankruptcy filing, according to a news release.

Under the agreement, all pending judicial actions will be suspended for 120 days. During that time, the student committee intends to continue to work with the DOE to further an approach that provides the impacted former students with long-term relief.

In exchange for the temporary stay, the committee agreed to withdraw its motion that sought a court-ordered stay of collection efforts on all Corinthian student loan debt.

“The Department of Education is committed to working with the Corinthian student committee on the debt issues its former students now face, to ensure that the committee and those it represents are treated fairly during the bankruptcy proceedings,” Public Counsel Opportunity Under Law director Mark Rosenbaum said in the release.

Public Counsel, along with attorneys from Robins Kaplan LLP, represents the student committee.

According to the release, hundreds of thousands of former students are adversely affected by the collapse of Corinthian, which once operated 107 campuses before shutting its doors in April.

The student committee had sought the imposition of a court-ordered freeze on efforts by any party to collect on obligations related to federal and private funding of Corinthian, which the release said were funds that would have been advanced for tuition, fees and other school-related expenses, while the responsibility for the repayment of those funds was determined in Corinthian’s bankruptcy.

In May, the U.S. Trustee’s Office granted the request of an informal group to recognize a special committee representing the interests of students in the proceedings.

Corinthian Colleges, a Santa Ana, Calif.-based post-secondary education company, filed for bankruptcy on May 4 in the U.S. Bankruptcy Court for the District of Delaware. The Chapter 11 case number is 15-10952.

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