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posted by martyb on Friday December 11 2015, @02:51AM   Printer-friendly
from the at-the-speed-of-government dept.

The Huffington Post reports

The U.S. Department of Education will cancel $27.8 million in federal student loans owed by some 1,300 former students of defunct for-profit school chain Corinthian Colleges Inc. after determining that the students were swindled into taking on the debt, according to a government report released [December 3].

The move marks the first recent use of a little-utilized provision in federal law that gives student debtors the right to petition the Education Department to discharge their debt in cases where they were defrauded into taking out loans.

The debt forgiveness plan only affects 1 percent of the roughly 125,000 student debtors who are eligible for expedited debt cancellation. That comes to about 2 percent of the students' nearly $1.3 billion in combined loan balances. The department said in June and November that those borrowers were eligible for immediate loan relief after determining that Corinthian had likely defrauded the former students by advertising false job placement rates.

[...] Borrower advocates [Debt Collective] criticized the department, led by Secretary Arne Duncan, for the paltry number of approved debt relief applications and the relatively small number of applications the department has received, compared to the number of eligible borrowers.

[...] "The department funneled billions of dollars to executives and shareholders of these fraudulent 'schools' for over a decade" [...] "It now wants to save face by creating a Rube Goldberg-type contraption to prevent as many people as possible from seeking the relief they deserve."

[...] Thursday's move comes six months after Education Undersecretary Ted Mitchell said the government would "fast track" applications submitted by students who attended certain programs at Heald College, a primarily California-based career school owned by Corinthian.

As the USA presidential race plods on, a footnote:

[More after the break.]

Bloomberg has reported

[In the summer of 2014], Senator Marco Rubio of Florida asked the U.S. Department of Education to "demonstrate leniency" toward Corinthian Colleges by permitting the wealthy for-profit company to continue accessing millions of dollars in federal financial aid while it was cooperating with a federal investigation.

Bloomberg has further reported

In the last five years, Florida Senator Marco Rubio's various political operations have accepted $27,600 in contributions from Corinthian Colleges.

The most recent donation [was from] Mark Pelesh, who was listed as a "business executive" for Corinthian Colleges. The donation came on April 30, one day after [Bloomberg's report noted above.]

Previous Corinthian Colleges stories

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  • (Score: 4, Informative) by c0lo on Friday December 11 2015, @04:28AM

    by c0lo (156) Subscriber Badge on Friday December 11 2015, @04:28AM (#274803) Journal

    It's not Corinthian that is the beneficiary of this leniency - it's their victims.

    It may be so, but that's not what TFS seems to imply. Bear with me:

    to "demonstrate leniency" toward Corinthian Colleges by permitting the wealthy for-profit company to continue accessing millions of dollars in federal financial aid while it was cooperating with a federal investigation.

    In my parsing, looks like the colleges still have a whole lot in the coffers (that "the wealthy for-profit company") and they don't what to touch them but ask for a bail-out.
    Maybe it is not so, maybe hon Rubio has indeed asked for leniency on behalf of the students; if so, TFS is loaded.
    But... is it so? Let's see the TFA:

    "It has been brought to my attention that the U.S. Department of Education has recently placed extreme financial constraints on Corinthian Colleges, Inc. by restricting the company's timely access to federal financial aid. It is my understanding the the Department of Education has requested extensive documents be provided by Corinthian Colleges for review, and Corinthian has acted in good faith to try to provide these documents as expeditiously as possible," Rubio wrote.

    Oops... not a word about students, the honourable seems to ask leniency on-towards the company.

    "While I commend the Department's desire to protect our nation's students from fraudulent and malicious activity by any institution of higher education, regardless of tax status, I believe the Department can and should demonstrate leniency as long as Corinthian Colleges, Inc. continues to expeditiously and earnestly cooperate by providing the documents requested."

    Ambiguous in regards with who should be shown leniency, but the structure of the phrase would rather point as not the students being the recepients. Because it looks like Rubio admits from the start that the students are not to blame (being duped by a "fraudulent and malicious activity", thus a no fault, no punishment necessary). The ones who should be punished are colleges and Rubio asks for leniency for them (as a reward for cooperating during the investigation).

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  • (Score: 3, Informative) by Thexalon on Friday December 11 2015, @12:32PM

    by Thexalon (636) on Friday December 11 2015, @12:32PM (#274936)

    Right, I understand that Rubio is corruptly screaming that Corinthian should be able to continue bilking the government and students.

    What's actually happening, though, is that the Dept of Education has cut off money to Corinthian and is relieving the debts of the defrauded students. Which is exactly what you'd hope would happen.

    The inverse of "I told you so" is "Nobody could have predicted"