Legal Clinics Could Be the Answer for For-Profit Victims

By Sheila E. Isong
This first appeared on

Recap of Corinthian’s Past and the Department of Education’s Response

Legal services for student borrowers are needed now more than ever to assist students who were misled by for-profit colleges.  Earlier this year, Corinthian Colleges filed for bankruptcy and effectively closed down all of its remaining North American schools–an action that affected more than 16,000 students.  This didn’t come as a surprise as the for-profit business has been in a web of controversy since it was revealed that they engaged in dishonest and predatory practices that lured students into their schools, and then left them unprepared for the workforce and with towering student loan debt.

Due to allegations of inflated job placement and exaggerated graduation rates, the Department of Education delayed Corinthian’s access to federal financial aid in June, 2014, causing a financial tailspin.  The Consumer Financial Protection Bureau is also suing Corinthian, alleging that they lured students into high-cost loans.

Earlier this week, the Department of Education announced their plans for Corinthian students to receive debt relief.  Based on the announcement, students will need to go through an individualized process to achieve relief, unless they attended specific programs at Heald–and in that case, they will have a simpler process.  The Department took an important first step by recognizing the need for relief for students who were targeted and defrauded by Corinthian and other dishonest schools.  Unfortunately, under their recent announcement, most students will need to apply for relief individually which will likely involve the consultation and hiring of specialized attorneys.

Limited Legal Resources Available

Because Corinthian students will have to go through an individualized claims process, it’s clear that we need legal resources available to challenge these illegal and predatory practices.  Many individuals who attend for-profit colleges are low–income and in no shape to hire expensive law firms to defend their rights. Moreover, each student will have to allege violations of the state law that the school violated. Corinthian operated in 23 different states and each case will require a separate legal analysis of consumer protection laws.

Currently, there are very few resources available for those who want to challenge dishonest for-profit institutions.  The National Consumer Law Center (NCLC), which works with non-profits, legal service organizations, private attorneys, policy makers, governments and the courts to stop exploitative practices and help low-income families advance economic fairness, is one of the only national organizations doing this work. However, NCLC does not have the capacity to help the hundreds of thousands of students that are eligible to submit Defense to Repayment claims.

Because of funding shortages and deficits, few legal service providers represent low-income student borrowers like the displaced Corinthian students.  The service providers that do exist offer only limited representation.  If volunteer pro bono programs exist to assist low-income borrowers, they have limited resources, minimal coordination and lack the national support necessary to reach the students that need their help.

Legal Clinics Could Provide Solution

Investment in legal clinics at accredited law schools could be a worthwhile solution to this problem.  Legal clinics are legal centers housed within most law schools around the country.  They generally function as non-profit law practices that serve public interest concerns.  Law school clinical programs both give law students practical, supervised experience and provide free, high-quality legal aid to low-income clients.  Clinical professors direct these students and the clinic offers pro bono representation in particular areas providing free legal services to clients.

At the heart of legal clinics are law students.  Students involved in sophisticated clinical programs have been known to provide exceptional client services on a variety of issues.  These students represent clients under the direct supervision of experienced law professors.  Because clinical programs that provide services on issues such as consumer law, civil rights, criminal justice, family law and environmental law have been around for decades, there are models that currently exist.  These models can be used to create a comprehensive student loan clinical program to provide student borrowers with high quality representation that brings about consumer education, representation in discharge cases and credit rehabilitation.

This expansion of what currently exists in the legal clinic world would be an efficient and effective way to address the needs of the thousands of Corinthian students who are currently without redress.  Because these programs are housed within law schools, there will be a robust and diverse atmosphere well-situated to solving student borrower problems.  A coordinated effort in establishing these clinical programs would allow student lawyers and their professors to engage in the systemic and systematic research required to provide legal and policy recommendations in the issue area of student debt law.

Borrowers would not have to worry about unpredictable or unprepared representation since these law students would be trained on the complexities of student loan litigation.  Students in these programs, in addition to learning the ins and outs of student loan law, learn how to discuss complex legal matters with clients, synthesize complicated legal issues, represent clients in the courtroom and in legal proceedings and employ diverse and persuasive legal tactics.

In the event that legal proceedings are more complex than legal clinics are equipped to handle, there would be a referral component of the programs.  This would involve referring clients to non-profit organizations, private attorneys and pro bono bar associations.  For this aspect of the program to be effective, these other attorneys will have to be trained in student loan-related law.

Legal clinics are not the end-all-be-all of student loan borrower concerns.  However, if these programs are invested in and developed, they can provide an effective avenue to exploring solutions to these issues.  At its peak in 2010, Corinthian enrolled 110,000 individuals. These students, and the many who enrolled before and after 2010 will need help deciphering the complex process to assert their right to discharge their federal student loans.  As we know that Corinthian is not the only bad actor in the sector, there are likely thousands of other students from other predatory and deceptive for-profit institutions who are entitled to relief.  If these individuals are going to get justice for the harm done to them, we need creative and new solutions to address their issues.  Legal clinics can provide part of that solution.

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