Despite its aggressive collection efforts, to date, more than 60% of
students with a Genesis loan have defaulted on that loan within three years.
- When Corinthian marketed, promoted, and facilitated these student loans,
Corinthian expected that most student-borrowers would default.
- Despite the high default rate, Corinthian marketed, promoted, and
facilitated the Genesis loan program because it could not rely solely on federal funding
for 100% of its revenue. Every Genesis loan dollar that Corinthian
induced its students to borrow, in effect, allowed Corinthian to receive up to an
additional nine dollars in Title IV aid. As a result, Corinthian had strong financial
incentives to induce its students into taking out Genesis loans, even given students
borrowers’ high default rates