WASHINGTON, DC – Congresswoman Jackie Speier (D-San Francisco/San Mateo) made the following statement about today’s decision by the Department of Education to offer a new debt relief process to students at Corinthian Colleges, a for-profit education company that filed for bankruptcy this spring.
“Students who were defrauded by Corinthian Colleges were just handed two enhanced options to deal with their student loan debt,” said Speier. “These institutions should never have been allowed to prey on students and taxpayers, but at least we can prevent students from losing their futures to unforgivable debt.”
The Department of Education has just announced new a debt relief process for students harmed by Corinthian Colleges. Under this process, students are eligible to apply for school loan discharge if they were attending a school run by Corinthian Colleges when it closed, or withdrew from the school dating back to June 20, 2014.
Secondly, the Department of Education stated that students who believe they were victims of fraud can seek loan forgiveness regardless of whether their schools closed. To do this, students can use the “defense to repayment” or “borrower’s defense” to pursue loan forgiveness if they believe they were defrauded by their college under state law. While these existing legal provisions have rarely been used in the past, the Department of Education has established a new process for reviewing such claims. The Department also found that Heald College misrepresented job placement rates for a significant number of its programs between 2010 and 2015 and therefore created an expedited process for those students using a simple attestation form. It will continue to make similar determinations for large groups of students who appear to have been defrauded in specific academic programs and on specific campuses.
Students can find out if they are eligible for debt relief on the department’s website at www.studentaid.gov/corinthian or by calling the toll-free hotline at 1-800-4-FED-AID (1-800-433-3243).