After many years of targeting low-income students through predatory and illegal recruiting practices, Corinthian Colleges is closing its remaining 28 campuses. Despite evidence of Corinthian’s widespread fraud, the U.S. Department of Education allowed Corinthian to enroll new students until just a few days ago. As a result, thousands of students throughout the country were deceived into taking on enormous student debt for a worthless education, through no fault of their own.
The Corinthian students affected by campus closures, including those on approved leaves of absence, are eligible for the full discharge of their federal loans. In addition, students who withdrew 120 days before their campus or online program closed will also be entitled to federal loan discharges. The Department may extend this period based on “extenuating circumstances.” Students may show extenuating circumstances by showing that the quality of the education deteriorated before they withdrew. State student protection funds in many states, including California, will also pay off eligible students’ private student loans.
Undersecretary Ted Mitchell recently stated that in the past, only 6 percent of students reached out to the Department about having their loans discharged. It is therefore critical that the Department immediately notify all students regarding their right to closed school discharges, as is required by federal regulations.
Over 10,000 students will need help understanding their options and completing discharge and student protection fund applications. We urge the Department and Corinthian to fund free legal services for students who are affected by the campus closures.
The Department could have prevented the harm to the thousands of Corinthian students. In the future, the Department must take swift and aggressive action to stop the flow of federal funds whenever it has reason to believe a school is engaging in illegal practices that harm students and taxpayers. It should also provide widespread debt cancellations for Corinthian students. Please send this message to the Department by signing NCLC’s petition and sharing the addresses with your friends, colleagues, and family:
Resources for Students:
For California students: The California Attorney General has a webpage dedicated to helping students identify whether they are eligible for closed school discharges of federal loans, Student Tuition Recovery Fund reimbursements of private loans, and available legal clinics in students’ geographic areas.
For non-California students:
Arizona, Ohio, Oregon and New York have similar student protection funds. Students may contact these states’ agencies to find out whether they qualify for reimbursement of their private loans.
In addition, we have posted contact information for free legal assistance.
Higher Education Not Debt has posted a closed school student loan discharge self-help packet.
