Victims Of For-Profit College Scam Refuse To Pay Back Loans
Over 100 former students who feel that they’ve been taken advantage of by the now-defunct Corinthian Colleges are taking a stand and refusing to repay their student loans.
A group of students, initially dubbed the “Corinthian 15,” recently sent a letter to the Dept. of Education (DOE) stating in no uncertain terms that they would no longer make student loan payments for loans they took out in order to attend various for-profit colleges owned by Corinthian Colleges (including Everest College, Heald College, and WyoTech). Within just a few weeks time, the number of participating students jumped from 15 to more than 100.
Corinthian Colleges struck a deal with the Department of Education in 2014 to either close or sell its schools amid allegations that it had lured students into its clutches by making advertising claims it could not or would not be able to fulfill. The question now remains” what the government will do about these loans?
In February of 2015, the Consumer Financial Protection Bureau (CFPB) also came to an agreement with Corinthian which would allow some former students to eliminate their private debt. The deal made with ECMC Group (which now owns a good many of the former Corinthian schools) provides forgiveness for $480 million for any students who were saddled with high cost, private student loans from Corinthian College. According to the CFPB, these loans carried interest rates that were substantially higher than students would pay with a federal student loan, and the tuition costs were much more expensive than similar programs at other educational institutions.
DID YOU KNOW?
While for-profit schools only account for 13 percent of all students, they account for almost 50 percent of all defaults on federal student loans.
Terms of the Agreement and the Effect of the Strike
According to the CFPB agreement, those borrowers who are covered by the agreement will notice the outstanding balances on their student loans will immediately incur a 40 percent decrease. The Department of Education is under pressure from politicians and activists to relieve all former Corinthian students of their federal loan debt. This strike (refusal to pay) is historic in nature according to one of the directors of the Debt Collective and one of the people who originally organized the Corinthian Collective.
When the Debt Collective first announced its campaign against Corinthian, hundreds of students showed interest in participating. Volunteers verified every student who was interested and advised them of some of the consequences they might face if they participated, which could include garnishment of tax refunds, social security, and wages along with a decline in their credit score. With this knowledge in hand, the number of students taking part is still rising.
Other Actions
The strikes are only the beginning of the action the group is launching. They also plan to soon submit claims by former Corinthian students directly to the steps of the Education Department. The premise of this legal appeal for discharge is based on the claim that the school is guilty of misleading students into taking out loans based on false promises of job prospects and career services.
If you are a former student of a for-profit college and feel that you’re a victim of predatory practices, we invite you to visit SchoolScamLawyer.com for more information on how a lawyer may be able to help.
Category: In The News
