THE WALL STREET JOURNAL: Senate Democrats Urge U.S. to Tear Up Corinthian Students’ Loans

Career College Central Summary:

  • Thirteen U.S. Senate Democrats are pushing Education Secretary Arne Duncan to wipe out federal loans given to students who enrolled in a troubled for-profit college that’s being dismantled amid federal and state investigations.
  • Sen. Elizabeth Warren (D., Mass.) and 12 other Democrats, sent a letter Tuesday urging Mr. Duncan to “immediately discharge” federal student loans for students at schools owned by Corinthian Colleges Inc., which reached an agreement with the federal government over the summer to dissolve itself.
  • An Education Department spokeswoman, Denise Horn, didn’t comment on the specific issues raised by the letter but said the agency appreciates “the senators’ concerns for the welfare of Corinthian students” and would continue “to work on behalf of students’ best interests.”
  • By taking out student loans, borrowers “are making a serious financial decision that will affect them for years to come,” the lawmakers wrote. “If colleges fail to hold up their end of the bargain—if they break the law in ways that bear on their students’ educational experience or finances—students should not literally be stuck paying the price.”
  • The lawmakers argue that the Education Department has “broad authority” to cancel student loans if schools violate students’ rights. They cite a provision of a federal loan agreement giving students the right to challenge collection of their loans if their school violates state law.

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THE WALL STREET JOURNAL

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