Nine Attorneys General Join “Corinthian 15,” Urge DOE To Provide Student Loan Debt Relief For Wronged Borrowers

A group of former and current Corinthian College Inc. students refusing to pay their federal student loans in protest of the government’s support of the crumbling for-profit college chain now have the backing of several top political officeholders afternine attorneys general from across the U.S. sent a letter to the Department of Education asking it to forgive the students’ loan debts.

The Sacramento Bee reports that the letter [PDF] – signed by the attorneys general from Massachusetts, California, Connecticut, Illinois, Kentucky, New Mexico, New York, Oregon and Washington – urges the Department to relieve students of their debt and asks the agency to work with state attorneys general to establish a clear system for student borrowers to seek relief when schools break the law.

“Our greatest concern comes from certain large, predatory for-profit schools that are actively undermining our federal loan programs, depriving students of the education they promise and that the students deserve,” the attorneys general write. “These institutions seem to exist largely to capture federal loan dollars and aggressively market their programs to veterans and low-income Americans.”

The group reports that the Department’s Office of Federal Student Aid provides more than $150 billion in federal loans and grants to over 13 million students each year, many of whom attend for-profit colleges.

“Too often, aggressive recruitment is the only thing these for-profit schools do well,” the letter states. “State investigations continue to uncover high-pressure sales tactics coupled with misleading and deceptive marketing that exploit students’ hopes and dreams.”

As for the students currently fighting the Department to forgive the loans they incurred while they attended CCI campuses including Everest University, Heald College and WyoTech, the attorneys general remind the agency of their legal authority to assist students harmed by the schools.

“These students deserve relief,” the letter states. “While various enforcers are pursuing Corinthian, these actions will not be enough to provide prompt help to Corinthian’s victims. The school’s liabilities likely exceed its assets, and it has made clear that it plans to file for bankruptcy and will likely try to limit the relief available to students as a result of the enforcement action.”

The attorneys general – many of whom have filed lawsuits or initiated investigations into CCI – provide the Department with two systems for student borrowers to seek debt relief if their school breaks the law.

The investigative findings of a state attorney general could be considered sufficient to establish borrower defenses to repayment for all students in the relevant cohort(s), and the state’s submission of such findings to the Secretary should be sufficient to be recognized as a defense to repayment of the loans of all affected students.

The Department could hold an administrative hearing to adjudicate a school’s conduct at which a state attorney general’s findings would be prima facie evidence of misconduct and the attorneys general could be invited to participate.

The letter comes just a month after a group of 15 Corinthian students began a “debt strike,” arguing they were defrauded by the college chain because of failures in government oversight. Since the strike began, the group has ballooned to more than 100 members.

Kamala Harris urges debt forgiveness for Corinthian students [The Sacramento Bee]

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