After doling out its largest penalty ever last week to Wells Fargo, the Consumer Financial Protection Bureau turned its lens to the for-profit college industry, forcing Bridgepoint Education, Inc. to discharge all outstanding student loans and refund payments to the borrowers.
The company also must pay an $8 million civil penalty to the bureau for illegal student lending practices.
The CFPB said the for-profit education company began offering private student loans in 2009, but misled students about the total cost of the debt. The CFPB maintains that Bridgepoint told students the wrong monthly repayment amounts—as little as $25 per month—so they would take out loans that ended up having higher monthly payments than promised.
“Bridgepoint deceived its students into taking out loans that cost more than advertised, and so we...