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AFR Statement: Department of Education must expedite and broaden relief to Corinthian students

Submitted by on March 25, 2016 – 2:16 pm
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We appreciate the news in the third report by the Borrower Defense Special Master Joseph A. Smith that an additional 546 former students of Heald College will finally be free of the debt they incurred as a result of the school’s fraud. We also appreciate that 190 former students of Wyotech and Everest will receive debt cancellation – the first students of these former schools to see relief. But the pace of relief for wronged Corinthian students through the Department of Education’s borrower defense to repayment process remains far too slow, and its scope frustratingly narrow. Only students who incurred debt after July 1, 2010 – the time period covered in the Department’s past enforcement actions – have been deemed eligible for cancellation. This leaves out far too many wronged borrowers, including all former students with FFEL loans.

With each passing day, more evidence accumulates that the illegal acts the Department and others documented in their enforcement actions were endemic throughout the Corinthian chain. Nonetheless, interest continues to accumulate on the federal student loans held by hundreds of thousands of former Corinthian students who have not yet received relief.

While the Department has made progress by finally releasing the attestation form for covered Everest and Wyotech students to use in seeking relief, we continue to believe that it is both unjust and unnecessary to require individual applications, especially in light of the default judgments secured by the Consumer Financial Protection Bureau and the California Attorney General’s office against Corinthian. We join with the advocates, lawmakers, and law enforcement officials who have all called on the Department use its legal authority to discharge debts of students covered by the Department’s enforcement actions without further delay and without requiring each borrower to make an individual application.

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