What We and Our Partners Think of Sen. Warren’s Corinthian Letter

Elizabeth Warren photo by Tim Pierce / CC-BY

Today, Senator Elizabeth Warren (D) from Massachusetts sent an open letter to Education Secretary John King highlighting The Department of Education’s sinister debt collection priorities over debt relief for past students of the fraudulent Corinthian Colleges. This letter comes following new data uncovered relating to the Education Department’s treatment of students who attended Corinthian Colleges, the large, for-profit educational outfit that filed for bankruptcy in 2015 amid findings from state and federal authorities that it had defrauded students.

Here’s what advocates and members of the Higher Ed, Not Debt campaign think:

American Federation of Teachers (AFT) President Randi Weingarten:

“For years, the Department of Education sat passively while Corinthian Colleges and other predatory for-profit institutions defrauded students and ripped off taxpayers. While it’s good the department has finally held Corinthian accountable, it now has an obligation to provide defrauded students with complete, immediate and automatic relief.

“The data show that the department knows exactly who is eligible for loan forgiveness, and it could easily pursue a comprehensive strategy. Instead, students who have already been preyed upon are being further impaired by the burden of completing an arduous and lengthy forgiveness process. The burden should not be on innocent students—that obligation lies with those who failed to protect them in the first place.

“We call on the department to take immediate and comprehensive action and give all defrauded students the relief they deserve and are afforded under the law.”

Americans for Financial Reform (AFR):

We commend Senator Elizabeth Warren (D-MA) for requesting and releasing data on the number of former Corinthian students in debt collection with the Department. When the Corinthian crisis hit, the Department of Education promised to provide former Corinthian students with “every penny of relief they are entitled to under law.” The findings released by Senator Warren show that the Department of Education has broken the commitment it made to scammed Corinthian students.

AFR has long called on the Department use its legal authority to discharge these debts now, without an individual application – as have former Corinthian students, advocates, lawmakers, and law enforcement officials, with requests dating back to 2014. It is shocking that even after years of this broad and diverse coalition making a powerful case for automatic cancellation of Corinthian debt, the Department has not taken the step of suspending debt collection for these defrauded students. While the Department slow-walks debt cancellation, former students struggle with the nightmare of ever-accruing interest, bad credit, seized tax returns, and garnished wages.

The Department has taken strong, important steps recently to protect students still ensnared at other predatory for-profit colleges like ITT Educational Services, Inc. (ITT). We commend the Department’s actions earlier this month to prohibit ITT from enrolling new students using federal financial aid, and to de-recognize a major accreditor of for-profit colleges, the Accrediting Council for Independent Colleges and Schools (ACICS). The Department must bring the same focus on protecting students it has brought to its actions on ITT and ACICS, and apply it to the former Corinthian students still buried in debt to a school the Department itself said it was “thrilled” to close. We call on the Department to immediately cease collections on defrauded Corinthian students, and to cancel these students’ debts without application, and without further delay.

Student Loan Borrowers Assistance (SLBA), a program of the National Consumer Law Center (NCLC), Staff Attorney Persis Yu:

For many years, NCLC has written about the draconian consequences the Department of Education imposes on borrowers in distress (see here, here and here). Knowingly imposing these punitive measures on vulnerable borrowers who were the victim of fraud is unconscionable. As Senator Warren highlights, the Department has seized benefits, including EITC payments from this group of borrowers. Seizing the EITC has a devastating impact on families and children. In May, we shared some of the stories we heard in our brief calling for an end to the seizure of the EITC.

Because the Department of Education is taking money designed to keep children out of poverty in order to repay a debt that should not exist underscores both why (1) the government needs to stop seizing EITC benefits and (2) that the Department needs to provide immediate and full relief to all of the borrowers defrauded by Corinthian Colleges.

We thank the Senator for taking a strong stand to protect student loan borrowers. On behalf of our low-income clients, we join her in demanding that the Department halt collection of Corinthian borrowers’ debt and discharge their loans.”

The Institute for College Access & Success (TICAS) Executive Vice President Pauline Abernathy:

“We call on the Department to immediately halt collections when it already knows the borrower was defrauded, and to stop requiring unnecessary discharge applications from such borrowers. Instead, the Department should automatically cancel the loans of students who attended Corinthian and other schools that the Department has evidence defrauded them, including Marinello School of Beauty, ATI Career Training Center, Westwood College, Career Education Corporation schools, FastTrain College, MedTech College, Harris School of Business, and Globe University and Minnesota School of Business. Students at these schools were trying to get ahead by going to college, and federal or state agencies have determined that their schools instead took advantage of them. They are entitled to discharges under federal law and deserve a fresh start.

“In addition, data released by the Department yesterday show that nearly 11,000 former ITT Technical Institute students who entered repayment in 2013 had defaulted on their federal loans by September 2015, and that nearly 36,000 ITT students who entered repayment between 2011 and 2013 defaulted within three years of entering repayment. The large number of former ITT Tech students unable to repay their loans underscores the urgent need to determine their eligibility for debt relief.”