Groups Call for Federal Loan Relief for Students of Corinthian Colleges

Categories: Education, News

On May 1, Americans for Financial Reform and 33 other organizations, including The Leadership Conference on Civil and Human Rights, sent a letter to Secretary of Education Arne Duncan urging him and the Department of Education to ensure that all current and former students of the for-profit Corinthian Colleges receive federal loan discharges.

The for-profit college giant has long been criticized by the civil rights community for trapping low-income students in predatory loans in exchange for a low-quality education. In April, the Department of Education fined Corinthian Colleges $30 million for lying about the success of its programs and misrepresenting job placement rates to current and prospective students.

The groups’ letter came on the heels of Corinthian Colleges’ announcement that it was closing its 30 remaining campuses, and expressed concern that students who are entitled to federal loan discharges are receiving incomplete and incorrect information about their options. Given the extensive evidence of widespread fraud at Corinthian Colleges, the groups urged the Department of Education to take the following actions immediately:

  • Extend the window for a closed loan discharge
  • Send loan discharge applications and clear information about options to all eligible students immediately
  • Remove schools under investigation for fraud or being sued by a state or federal agency for fraud from any Department lists of transfer options
  • Establish a special hotline for Corinthian students
  • Record all Department of Education staff or contractor calls with Corinthian students
  • Direct servicers to send representatives to any meetings with students

Three days after the letter was sent, Corinthian Colleges filed for bankruptcy. You can read the letter in its entirety here.