Americans for Financial Reform applauds the Department of Education’s final decision to de-recognize a major accreditor of for-profit colleges, the Accrediting Council for Independent Colleges and Schools (ACICS). The Department’s decision to no longer recognize ACICS is an important step toward ensuring that students and taxpayers do not bear the burden of illegal and fraudulent acts by for-profit colleges.
AFR welcomes the news that the Department of Education has finalized a rule that will prohibit the use of forced arbitration at schools. We hope that as the Department moves forward to procedural guidance and to enforcement that it does everything possible to ensure that no defrauded borrower be left buried in debt from a school that broke the law, betrayed its students, and cheated taxpayers.
“[C]onsumer advocates worry that people already contending with the existing process still face an uphill battle. ‘If you do the math, there are well over 80 percent of folks who are eligible that either don’t know to apply or have applied and the Education Department hasn’t done anything with their application,’ said Alexis Goldstein, senior policy analyst at the progressive Americans for Financial Reform. ‘I don’t understand why the department is insisting on doing this person by person, instead of just approving students automatically.’”
AFR submitted comments to the Department of Education suggesting ways to ensure that their borrower defense proposal can truly provide a fair and transparent processes for students seeking debt relief following illegal acts by their schools.
Over 10,000 members of Americans for Financial Reform signed a petition calling on the Department to provide full loan relief to defrauded students, provide automatic loan cancellation when there is sufficient evidence of a school’s wrongdoing, not impose time limits on relief for defrauded borrowers, and close gaping loopholes allowing unscrupulous schools to prevent injured students from having their day in court.
“We continue to believe that the Department should be providing automatic group relief for wronged Corinthian students, rather than pursuing the application-based, piecemeal approach it has taken to discharges thus far.”
“For years, advocates have urged the Department of Education to relieve the staggering debt of students who attended for-profit colleges like Corinthian which broke the law. Today, the Department released a forward-looking proposal outlining how students who were victims of illegal acts by their school may pursue a ‘borrower defense to repayment,’ or cancellation of the debt on their federal student loans. We look forward to working with the Department to improve the final proposal so that all students victimized by unlawful and deceptive conduct receive every penny of relief they deserve.”
AFR wrote to the Department of Education and urged them to ensure their contracts with student loan servicers have strong protections for borrowers.
“The pace of relief for wronged Corinthian students…remains far too slow, and its scope frustratingly narrow,” said Alexis Goldstein, senior policy analyst at the progressive Americans for Financial Reform. She pointed out that only students who took out loans after July 2010 are eligible for debt cancellation, which excludes borrowers with old bank-based federal student loans.
“The pace of relief for wronged Corinthian students…remains far too slow, and its scope frustratingly narrow,” said Alexis Goldstein, senior policy analyst at the progressive Americans for Financial Reform. She pointed out that only students who took out loans after July 2010 are eligible for debt cancellation, which excludes borrowers with old bank-based federal student loans.