Democrats Push Arne Duncan To Aid Defrauded For-Profit College Students
Pressure is mounting on the education secretary to relieve defrauded student loan borrowers of their debts.
Education Secretary Arne Duncan should stop delaying promised debt relief to defrauded student loan borrowers and use a recent federal court ruling to immediately cancel all federal loans owed by former Corinthian Colleges Inc. students, a group of Democratic lawmakersurged Monday.
A federal judge in Chicago ruled on Oct. 27 that Corinthian violated federal law by defrauding more than 115,000 of its former students when its schools used false job placement rates to deceive them into taking out private student loans. Students typically take out private loans after reaching federal student loan borrowing limits.
The company declared bankruptcy in May, eight months after the federal Consumer Financial Protection Bureau alleged it systematically cheated students by advertising "bogus" job prospects to lure them into enrolling and taking out the private loans. At its peak, Corinthian operated more than 120 colleges under the Everest, Wyotech and Heald brands.
A little-used provision in federal law allows defrauded student borrowers to apply for debt cancellations when they believe they’ve been misled into taking out federal student loans. Debtors hoping to get their loans discharged by arguing they were duped by their schools into taking out the debt would have an easier time if they obtained court judgments in their favor, Education Undersecretary Ted Mitchell said in June.
"The department should use this judgment to make good on that promise to students and move expeditiously in granting relief for Corinthian’s former students who were the victims of harmful and deceptive practices," 17 lawmakers, including Sen. Elizabeth Warren (D-Mass.), wrote in a joint letter dated Monday.
Dorie Nolt, an Education Department spokeswoman, said department officials "appreciate the concerns for the welfare of Corinthian students."
Their demand comes as influential Democrats increasingly criticize Duncan for what they describe as inaction in the face of mounting evidence that some for-profit colleges routinely mislead prospective students into enrolling with false job placement and graduation rates, then load them up with debt in exchange for credentials of dubious value.
"The Department of Education for far too many years has not ensured that for-profit schools have credible programs," Rep. Maxine Waters (D-Calif.), the top Democrat on the House Democrats Push Arne Duncan To Aid Defrauded For-Profit College Students:
