ED CENTRAL: Here’s What ECMC Needs to Do For Students in the Corinthian Colleges Deal

Career College Central Summary:

  • Provide opportunities for a fresh start

    • The Higher Education Act allows students to discharge their federal loans if their college closed before they finished their program and they were unable to transfer elsewhere. But since the Corinthian campuses would not close under ECMC, students would be denied that fresh start option.
    • Because the discharge rules are tied only to close of campuses, the inability to get rid of loans will extend to students in any program voluntarily shut down by ECMC, such as the associate degree in criminal justice. They might be able to refund their money, but only if: (1) enough of the $8 million set aside for that purpose remains; (2) they are in a business, criminal justice, or paralegal program; and (3) their program has a placement rate below 66 percent. And to be clear, while some Corinthian students may want to finish their programs, others are looking for a restart.
    • The first step in making a better deal for students is finding creative ways to provide a fresh start to borrowers who want one. Here’s one option. ECMC is promising to meet with each student within seven days of the deal closing. That discussion should include a review of debt levels and an option to pursue a discharge. If the student agrees, ECMC should transfer the student’s enrollment to one of the campuses where ECMC is agreeing to oversee its closure (such as Cross Lanes in West Virginia). When that campus actually closes, the student would then get a loan discharge. ECMC should offer a similar option to any student in a program it closes after the initial discussion.
    • The Department can play a role here too by using its authority to extend the 120 day window for a loan discharge on the grounds that the Corinthian situation is an exceptional circumstance.
  • More Programs Need to Go

    • The criminal justice program that ECMC is agreeing to close looks terrible under available data: 32 percent of borrowers default on their loans and typical debt is nearly 15 percent of annual earnings for graduates, who make just $20,722.
    • But the criminal justice degree is not an outlier. There are many other programs at the Corinthian campuses ECMC is buying that look nearly identical.

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