Mass. AG, Lawmakers Call For More Assistance For Former Corinthian College Students

Ever since for-profit education chain Corinthian Colleges Inc. closed its Everest University, WyoTech and Heald College campuses, leaving tens of thousands of students with millions of dollars in loans, consumers advocates, legislators and others have urged the Department of Education to relieve former students of their debt burdens. Those calls for help continued on Tuesday with renewed pressure from Massachusetts Attorney General Marua Healey and Sen. Elizabeth Warren calling on the Dept. to rid victims of the defunct for-profit college of unsustainable loan payments.

The request for assistance came during a Boston University event to help students receive individualized assistance in enrolling students in more affordable repayment plans and applying for cancellation of their federal student loans.

“For too long, predatory for-profit schools, supported by taxpayer dollars, have enriched themselves while loading up students with unaffordable debt,” AG Healey said. “Students deserve better. If a school breaks the law, Senator Warren and I believe they must be held accountable. We want to help get these students the relief they deserve.”

At the event, students shared their experiences attending Everest Institute’s Brighton campus via sworn affidavits that will be used to support the attorney general’s push for investigations that could lead to relief for students seeking discharge of federal loans after attending allegedly predatory for-profit colleges.

“When a college engages in fraudulent practices, students have a legal right to debt relief,” Senator Warren said. “If someone lies about the mileage on a car, the buyer can get her money back. I’m working with Attorney General Healey to ensure that the legal rights of any students who were cheated by Corinthian colleges in Massachusetts are fully protected.”

The Dept. of Education announced back in June that students who attended (after June 20, 2014) the 30 CCI campuses that closed in April had two options to seek relief:

1. Apply for a closed school loan discharge, which would get rid of the obligation to repay and reimburse the student for any payments made; or
2. Transfer earned credit to another institution to continue their education in a comparable program.

While the options give students some relief, the Dept. of Education announced last month that it would work to overhaul its loan forgiveness program for students defrauded by schools.

Starting this month, the Dept. of Education will begin working to craft a new process aimed at making it easier for students to have their federal loans discharged if the school they attended was found to have used illegal or deceptive tactics to persuade them to borrow funds to finance their education.

The process to create a more streamlined loan forgiveness process will include field hearings and the creation of an advisory panel, the Dept. said in an announcement.

Last spring, the Massachusetts Attorney General’s office filed a lawsuit against Everest Institute alleging the school engaged in deceptive marketing and egregious high pressure sales tactics that left students with exorbitant and unaffordable student loan debt and without proper training or a well-paying career.

Everest’s parent company – Corinthian – then entered a downward spiral including several state and federal investigations into its enrollment practices.

The company eventually closed in April 2015, filing for bankruptcy soon after.

AG Healey and U.S. Senator Warren Seek Cancelation of Loans for Students Victimized by For-Profit School [Attorney General Maura Healey]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.