Ever since now-bankrupt Corinthian Colleges Inc. began its downward spiral, consumer advocates, students and legislators have urged the powers that be to provide relief for students of Everest University, Heald College and WyoTech. Today, that plea continued as nine senators called on the Department of Education to provide support to the 16,000 students affected by the company’s final closure.
The letter to Secretary of Education Arne Duncan once again asks that the Dept. use its authority under the Higher Education Act to provide a closed school loan discharge to all eligible students.
Under the Higher Education Act, if a student attends a school slated for closure, or if that student withdrew within 120 days of the school closing, they may be entitled to a closed school discharge.
This means that the student would have no further obligation to repay their Direct Loans, Federal Family Education Loan (FFEL) Program loans (which include Stafford and PLUS loans), or Perkins Loans.
The senators – including Barbara Boxer of California, Patty Murray of Washington, Dianne Feinstein of California, Jack Reed of Rhode Island, Jeff Merkley of Oregon, Richard Blumenthal of Connecticut, Tammy Baldwin of Wisconsin, Mazie Hirono of Hawaii and Sherrod Brown of Ohio – also urge Duncan to use the Department’s authority to extend the 120 day withdraw window to accommodate students who may have left the school prior to the deadline.
“Former students ineligible for a closed school loan discharge may be able to assert a defense to repayment, due to Corinthian’s alleged fraudulent practices,” the letter states. “However, the Department of Education has not issued clear guidance on which students are eligible to assert a defense or the process for asserting a defense.”
The group also urged the Department to create a process in which all students are treated fairly by creating a consumer friendly process for borrowers’ to submit their discharge claims.
“Any defense to repayment or other process that may be announced should contain a simple and streamlined application process for borrowers who have been harmed, and should allow group claims to the maximum extent allowable under law,” the letter states. “While you work on the details of this potential process, you should also provide these borrowers interim relief through your authority to grant forbearances or suspend collection activities. Our first priority should be making sure we help these students any way we can.”
In addition to asking the Department to provide financial relief to former CCI students, the letter also asks Duncan to remove institutions under investigation for deceptive and fraudulent practices from a list of schools students could potentially transfer to.
Last week, Sen. Dick Durbin of Illinois criticized the Department for including an array of schools that have allegedly harmed students as “viable options” to continue their education.
Senators Urge Secretary of Education Arne Duncan To Provide Support To Students Affected By The Closure Of Corinthian Colleges [Barbara Boxer]
by Ashlee Kieler via Consumerist
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