Update | Department of Education Illegally Slashes Debt Relief for Corinthian Borrowers

December 21, 2017

Martin was talked into WyoTech’s automotive technology program instead of community college. But the program was a complete fraud – he rarely touched a car while there, and the great jobs promised to him were unavailable. The Department of Education acknowledged that Martin was lied to and misled, and he applied to have his federal student loans from WyoTech discharged. Still, the Department has seized two years of Martin’s tax refunds and garnished his wages to pay back his federal loans from this fraudulent institution.

This isn’t just wrong, it’s illegal. By announcing that it was illegally attempting to slash the relief available to borrowers, the Department is engaging in the same bait and switch tactics as Corinthian—which owned Heald, Everest, and Wyotech.

That’s why this week, Martin and two other named plaintiffs filed a filed a nation-wide class action against the Department of Education for illegally and unfairly denying complete relief to tens of thousands of former Corinthian students who the Department already decided are entitled to have their loans discharged and their payments refunded.

The borrowers are represented by the Project on Predatory Student Lending at the Legal Services Center of Harvard Law School, and Housing and Economic Rights Advocates of Oakland, California.

The three named plaintiffs in this suit are just three of many thousands of people who have experienced the systematic exploitation and fraud that for-profit colleges have engaged in –fraud that is enabled by taxpayer funds and the Department of Education.

  • Martin Calvillo Manriquez barely had an opportunity to touch cars or car parts while he was enrolled in his automotive program. The school didn’t have tools or certified instructors. Martin has never had a job related to auto repair. His debt from Corinthian is the only line on his credit report.
  • Rthwan Dobashi owes more than $20,000 for the same program. He has also never worked in the field. He is married, has two children, and is expecting a third. In early 2016, he found out from the attorney general that he was eligible to have his debts from WyoTech cancelled, and he applied. He also told one of his friends from school, and his friend applied, too. His friend’s loans were discharged almost a year ago, while Rthwan still hasn’t heard anything from the Department.
  • Jamal Cornelius attended the Information Technology-Emphasis in Network Security program at Heald College, and borrowed more than $25,000. He has been waiting more than fourteen months for any response to his application for relief.

All three borrowers, and all class members, are entitled to relief pursuant to the Department’s Corinthian Job Placement Rate Rule, which it has established through countless public statements, previous discharges, and direct notice to tens of thousands of covered individuals.

After we filed this case, the Department announced that it would slash the loan cancellation for defrauded borrowers who attended schools owned by Corinthian Colleges – departing from the established rule and illegally applying changes retroactively. It is completely unlawful for the Department to go back on its word in this way.

These students were already lied to by Corinthian. Now they have been lied to by the federal government, too.