HUFFINGTON POST: ‘Corinthian 100’ Ask Education Department: What About Us?

Career College Central Summary:

  • Fourteen federal student loan borrowers refusing to make their monthly payments to protest the U.S. Department of Education's shoddy oversight of for-profit colleges met with senior government officials on Tuesday to share their stories and learn about the department's plan to help them.
  • The Education Department’s answer, in short: Keep on waiting.
  • The borrowers are part of the so-called Corinthian 100, a growing group of roughly 100 former students of schools once owned by Corinthian Colleges Inc., the troubled owner of what was once one of the largest chains of for-profit campuses, and are now struggling with their debts.
  • Over the past few years, state and federal authorities have sued Corinthian, alleging the company duped students into taking out loans by advertising false job placement and graduation rates. The company denies the claims. The borrowers, organized by anti-debt activists borne out of the Occupy Wall Street movement, now want the Education Department to forgive federal student loans taken out by current and former Corinthian students on the grounds that borrowers shouldn't have to repay debt based on a school's fraud.
  • The group, which says it has amassed more than 300 applications from former Corinthian students wishing to have their debts discharged, claims it has the law on its side, pointing to federal statutes and a provision in their loan agreements that states borrowers can refuse to repay debts if they were defrauded by their school. Some Democrats in Congress are on their side, but it’s not clear whether the Education Department stands with them.
  • The Tuesday afternoon meeting, organized by the Consumer Financial Protection Bureau and held at one of its offices in Washington, provided a glimpse into the long odds the Corinthian 100 face.
  • “The consumer bureau seems to be on our side, but the Education Department seems to need a fire under their ass,” said Jessica King of Newport News, Virginia, a borrower who attended the meeting. “And we're the ones who will light it.”
  • Officials from the CFPB, Education Department and Department of the Treasury listened to borrowers such as King who claim they were either lured into taking out loans with bogus promises of future job prospects or were simply signed up for loans by their school’s staff without their consent.
  • Some of the borrowers cried as they explained why they attended Corinthian-owned schools, the shock they faced when they couldn’t get jobs with their credentials and the fear they live under as a result of mounting debts they can’t afford to repay.
  • “Like so many other current and former Corinthian students we have heard from across the country, dreams of higher education have been turned into stories of financial despair,” said Rohit Chopra, the CFPB’s point man on student issues. “We continue to urge struggling borrowers to submit complaints with federal agencies to aid regulators in holding accountable those who break the law.”
  • Joining Chopra at the meeting were Undersecretary of Education Ted Mitchell and Deputy Undersecretary of Education Jeff Appel. Prosecutors from state attorneys general offices in Massachusetts, Kentucky, Oregon and New York joined the session via conference call.

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