- 16 Democrats urged the Education Department to forgive student debt for former Corinthian College students.
- Corinthian shut down in 2015 amid accusations of fraud, but many of its students are still waiting for relief.
- They want an update from the department on where those discharges stand and why they’re being delayed.
It’s been seven years since a for-profit college closed its doors amid accusations of fraud, and a group of Democratic lawmakers say it’s long past its students got the relief they were promised.
On Monday, 16 lawmakers, including Massachusetts Sen. Elizabeth Warren and Washington Rep. Pramila Jayapal, wrote a letter to Education Sec. Miguel Cardona requesting an updated timeline for when former Corinthian College students will receive student-loan forgiveness.
Corinthian shut its doors in 2015 following accusations of misleading borrowers and causing them to take on unmanageable student debt loads, but many of those borrowers are still waiting for their loan forgiveness claims to be approved.
The lawmakers wrote that the Education Department has processed those claims in “a complex and piecemeal fashion” that has “delayed relief for thousands of borrowers while seemingly denying thousands of others any relief at all.”
“For the estimated 350,000 students defrauded by Corinthian, which closed its campuses in 2015, the wait for debt cancellation has spanned three presidential administrations,” the lawmakers wrote. “ED has failed to make good in its promise to defrauded borrowers, and it is time for swift and broad action to right this wrong,” they added.
The borrower defense to repayment – a loan forgiveness process for defrauded students – was established in 2015 under former President Barack Obama following a series of school closures caused by allegations of fraud. Corinthian is one of the most well-known cases, followed a year later by the closure of ITT Technical Institutes.
As Insider previously reported, the Consumer Financial Protection Bureau, along with Sen. Warren, were investigating the school over accusations of deceptive marketing, high student-loan defaults, and lying about graduation rates.
But while borrower defense claims were intended to remedy the harm the schools placed on students, the program ran up a 99% denial rate under former Education Secretary Betsy DeVos, and to date, the department has only approved 107,000 claims out of the 429,000 filed, the lawmakers wrote.
As a result, they’re giving Cardona until April 5 to provide information on the number of Corinthian students who have applied for a discharge of their debt, reasoning behind delays in relief, and an update on all filed borrower defense claims to date.
Biden is still working to reform relief for defrauded borrowers
Given the high denial rate for borrower defense claims under his predecessor, Cardona rescinded DeVos’ methodology for calculating relief last March, which gave only partial relief to defrauded borrowers, and he has since canceled $ 2 billion in student debt for 107,000 defrauded students.
But some advocates and lawmakers are still pushing for the administration to do more. Most recently, the department announced additional steps to hold owners of privately-held colleges responsible for the costs when a school shuts down and strands it students.
But it fell short of holding the individual executives of those colleges personally liable for those costs – something the lawmakers also asked the department about in their Monday letter.
And on Thursday, the Project on Predatory Student Lending at Harvard, the New York Legal Assistance Group, and the Legal Aid Foundation of Los Angeles wrote a letter to Cardona urging him to discharge debt from students who attended for-profit schools with an closure date. prior to 1994, arguing that those students have “suffered years of collection harassment, credit damage, occupational license removals, benefits seizures, and other punitive measures” and should qualify for relief.