Project on Predatory Student Lending Launches #CancelCorinthian Campaign | Press Release

October 15, 2018

Thousands of Former Corinthian Students Are Eligible for Debt Cancellation;

Attorneys General, Senators, Others Urge Department of Education To Cancel All Corinthian Debt

 

BOSTON – Today, Senator Dick Durbin, Congressman Joe Kennedy, Attorney General Maura Healey, the Debt Collective organization and others joined the Project on Predatory Student Lending to launch a public awareness campaign urging eligible students of former Corinthian Colleges (Heald, WyoTech, and Everest) to apply to have the Department of Education cancel their debts. They also forcefully urged the Department to cancel this illegal debt for Corinthian students once and for all.

An online tool has been created to help students determine whether they are eligible to apply using a simple form. 

This follows a major court ruling earlier this year that invalidated the Department of Education’s policy of partially denying loan cancellation to certain former Corinthian Colleges students and ordered the Department not to collect from certain Corinthian students who have applied to have their loans cancelled. There are still many thousands of former Corinthian students who are eligible for relief using this simple form but have not applied for loan cancellation.

“For cheated Corinthian students who faced the added indignity of being denied the loan cancellation they are due by law, the ruling provided immediate and necessary relief,” said Project on Predatory Student Lending Director Toby Merrill. “We will keep pushing the Department of Education to completely cancel all Corinthian debt. As we wait for the Department to do the right thing, there are thousands of former Corinthian students who are unnecessarily facing collections and financial hardship, but if they apply to have their debts cancelled, collections must stop. It’s critical that students visit our site to get more information and the forms to apply for relief from these bogus debts.”

The case, Calvillo Manriquez v. DeVos, is a putative class action. Four former Corinthian students are seeking to represent a class of Corinthian borrowers nationwide whoenrolled at a Corinthian-owned school during dates that vary by campus and program. The Project has created a web page with resources to tell former students of Corinthian-owned schools whether they are members of the class, and which form they should fill out to apply for loan cancellation. The lawyers and elected officials are encouraging all former Corinthian students to apply to the Department of Education to cancel their loans.

“The Department of Education, under the Trump Administration and Secretary DeVos, has ignored tens of thousands of defrauded Corinthian students seeking discharges of their federal student debt, or shortchanged them with partial relief, said Senator Dick Durbin.  “These borrowers have gone through enough already – they’ve had their lives upended by a predatory company – and don’t deserve to be further harmed by their own government.  It’s time for Secretary DeVos to fully discharge the federal student debt of defrauded Corinthian borrowers once and for all.”

“Students defrauded by predatory for-profit colleges should not have their burden compounded by an indifferent government,” said Congressman Joe Kennedy III. “It’s our responsibility to raise awareness, provide Corinthian students the correct resources to apply for loan relief, and better yet, force the Department of Education to cancel their debt immediately. The Project on Predatory Student Lending has worked tirelessly to ensure Corinthian College students are entitled to loan cancellation, and I am deeply grateful for their advocacy.”

“Corinthian repeatedly violated our state laws, cheated students and taxpayers out of millions of dollars, and left thousands of families across the country with unaffordable debt,” said Massachusetts Attorney General Maura Healey. “For years we have worked to secure loan forgiveness for borrowers only to get stonewalled by Secretary DeVos and her team of for-profit executives. It’s time to get these students the relief they deserve.”

The Debt Collective organization said in a statement:  “Next month marks the four-year anniversary of Corinthian borrowers’ fight for debt relief. In November 2014, a group of former students stormed a public hearing being hosted by the Department of Education in Anaheim, CA to demand cancellation of their federal student loans. Even then, reams of evidence had already been produced documenting their former school’s illegal and immoral actions. When their demands were not met, those borrowers joined with others to launch the Debt Collective and declare the first student debt strike in US history. The strike went viral, was featured in national and international media, and won the support of members of Congress and eleven state Attorneys General. It took two more years of tenacity, including two meetings in Washington DC between debt strikers, lawmakers and Department of Education leadership, to win the right to apply for debt relief and to have their loans discharged under the Defense to Repayment law. While the current administration has refused to honor that commitment, a recent injunction suggests debtors who attended Corinthian may finally get the relief they deserve. The Debt Collective is pleased to stand with our allies at the Project on Predatory Student Lending to spread the word that all former Corinthian debts are illegitimate and must be cancelled. We call on Congressional representatives and candidates to pressure the Department to abolish these odious debts – and the debts of all for-profit college borrowers. We know the Department of Education has the authority to wipe the slate clean once and for all and we demand that they use it.”

Case background: Calvillo Manriquez v. DeVos

Under the Department of Education’s watch, Corinthian, the parent company to Heald, WyoTech, and Everest campuses, took in billions of dollars in taxpayer money and used boiler-room-style high-pressure tactics and racially-targeted advertising to build its business, all while producing outcomes for students so terrible that it had to lie to stay in business. Corinthian filed for bankruptcy, but the students it cheated were left thousands of dollars in debt for an education they never received.

In March, the Department notified some former students that because the average earnings of Corinthian students who attended their program were not less than half of the average earnings of some unspecified group of students who went to a different, non-Corinthian school, they must repay a portion of their invalid loans. In coming up with this murky and convoluted calculation, the Department secretly and illegally gathered information about borrowers’ earnings from the Social Security Administration. Perversely, the Department obtained the data from SSA pursuant to an information sharing agreement entered into for the purpose of protecting the public from predatory institutions like Corinthian by publishing “gainful employment” metrics.

In a groundbreaking May 26 decision, the judge granted a preliminary injunction stopping the Department of Education from applying this illegal “average earnings rule” and ordered the Department to stop collecting on the plaintiffs’ loans. In response to that ruling, the Department refused to stop collecting from the thousands of borrowers hurt by its illegal actions and whose applications for relief it had adjudicated under its illegal rule, and only stopped collecting on the loans of the four named plaintiffs who represent the class in the case. The judge again rebuked the Department, rejecting its unreasonable and narrow interpretation of the May 26 ruling and clarifying that the order to stop collecting means that the Department must stop collecting loans from all individuals whose loans are tainted by Corinthian’s fraud.

For more information about the case and the  preliminary injunction, click here.

The borrowers are represented by the Project on Predatory Student Lending of the Legal Services Center of Harvard Law School and Housing and Economic Rights Advocates (HERA).

 

About the Project on Predatory Student Lending

Established in 2012, the Project on Predatory Student Lending represents former students of predatory for-profit colleges. Its mission is to litigate to make it legally and financially impossible for federally-funded predatory schools to cheat students and taxpayers.

The Project has brought a wide variety of cases on behalf of former students of for-profit colleges. It has sued the federal Department of Education for its failures to meet its legal obligation to police this industry and stop the perpetration and collection of fraudulent student loan debt.

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