California Attorney General Xavier Becerra Says Students Start Getting Loan Forgiveness After Being Scammed By Corinthian Colleges And Other Predatory For-Profit Colleges
March 19, 2021 – SACRAMENTO – Attorney General Xavier Becerra today released a statement following the US Secretary of Education Miguel Cardona’s announcement today that the US Department of Education (ED) will write off the student loan debt of approximately 72,000 student borrowers who have been swindled by predatory for-profit colleges, including Corinthian Colleges and ITT Technical Institute, now extinct and overwhelmingly predatory.
“We applaud the Biden administration’s Education Department for providing an additional $ 1 billion in student loan debt relief to borrowers who have been defrauded by Corinthian colleges and other predatory for-profit colleges. Across the country”, said Attorney General Becerra. “This is an important first step that builds on the work our office has done with the Obama administration and the legal challenges we have taken to oppose the Trump administration’s ruthless refusal to alleviate the debt. This vital work continues, however, as many students still wait for relief after falling prey to these same twisted tactics by dishonest for-profit colleges. “
In 2013, the California Attorney General’s Office filed a complaint against Corinthian to end the for-profit college’s abusive practices. As a result of this and other regulatory actions, Corinthian permanently closed all of its schools in California in April 2015 and filed for bankruptcy the following month. In June 2015, ED made some findings—based on a joint investigation with the California Attorney General’s Office– that former students who relied on Corinthian’s falsified placement rates had a valid “borrower defense” claim entitling them to complete relief from their federal student loans. However, with the change of administration from President Obama to President Trump, ED and Education Secretary Betsy DeVos reneged on that promise and refused to honor their loan forgiveness obligations. In December 2017, Attorney General Becerra sued the Trump administration for this failure, seeking to ensure that defrauded Corinthian borrowers received the full relief they were promised.
Today’s announcement is an important first step in delivering on promises ED made to defrauded borrowers almost five years ago. ED’s announcement applies to the cohort of student borrowers whose applications for assistance have been approved, which includes tens of thousands of students who attended Corinthian and ITT. Many other borrowers should still be eligible for loan cancellation because they have outstanding claims with ED or were rejected under the Trump administration.
Source: CA. MJ