The Department of Education Suggests Suspect For-Profit Colleges as Corinthian Stand-ins
NEW YORK (MainStreet) — Corinthian Colleges may be gone, but the 16,000 students left in the lurch are still here--and they want to finish their degrees. If you're the Department of Education (ED), you're looking for someplace for them to go. Who are you going to call?
Would you believe ITT Technical Institute?
Those 16,000 students represent millions of dollars in student loans--nearly $215 million by some estimations.
The specter of a massive loan write-off may be among the reasons that ED could be desperate to farm these students out to other for-profit schools. The federal government would recover something, since the loan write-offs would have to be reported by the borrower as income. Not every loan would be written off. Still, the likelihood is that ED wants to get paid as much as possible.
"Our priority is to offer immediate help to the 16,000 Corinthian students suddenly notified that their school would be closed, in part by providing information and options to those who may wish to complete their education," said ED spokesperson Denise Horn. "We also sent students information about their eligibility for closed school discharge and have instructed our (loan) servicers to reach out directly to affected borrowers to share information on options." ED contracts with Great Lakes Education, Navient (formerly Sallie Mae), NelNet, and the Pennsylvania Higher Education Assistance Agency to collect on Federal student loans.
But ED is in a tight spot--one that will get tighter as calls for unconditional loan discharges become louder. "There is overwhelming evidence of widespread fraud at Corinthian," said Lauren Asher, president of The Institute for College Access and Success (TICAS), in a statement. "Nothing can give students back the time they spend trying to improve their lives at Corinthian, but they must be able to start fresh by having their loans discharged. We urge the Education Department to discharge the Federal loans of current and former Corinthian students who were defrauded, including those affected by Corinthian's action."
Making sure that Corinthian students take their Corinthian credits—and their loans—to another school guaranties that ED will get paid. On Monday, Senator Dick Durbin (D-Ill.) pointed out in a speech to the Senate, "If you transfer your Corinthian credits, which already have limited value, to another school, you can't discharge your loan you took out at Corinthian."
The Art Institutes and Argosy University, whose parent company, Education Management Corporation, is under investigation by the Department of Justice and 17 state attorneys general. The schools are also on ED's Heightened Cash Monitoring list and have had Federal funds restricted due to problems that surfaced in an audit.
DeVry University, which is under investigation by the Federal Trade Commission and two state attorneys general.
Le Cordon Bleu and International Academy of Design and Technology, whose parent company, Career Education Corporation, is being investigated by 17 state attorneys general and are also on ED's Heightened Cash Monitoring list.
Kaplan University, which is under investigation by three state attorneys general.
University of Phoenix, whose parent company, Apollo Education Group, is being investigated by two state attorneys general.
ED's Denise Horn defended the Department's handling of Corinthian: "Corinthian's closure follows a series of aggressive enforcement actions aimed at protecting students and taxpayers against an unscrupulous company"--one that ED bankrolled for years.
During the last year, once it was clear the Corinthian had become dysfunctional, ED moved to shut it down. Horn said that "the Department has acted consistently and strongly to help students, avoiding the immediate disruption in education for 72,000 students. With this week's closure, the Department will continue to work urgently to do everything possible to protect students, borrowers and taxpayers.”The Department of Education Suggests Suspect For-Profit Colleges as Corinthian Stand-ins - MainStreet:
