|Title||Update: Education Department to Cancel $27M of Corinthian Colleges Students' Debt|
|Date||Friday December 11 2015, @02:51AM|
|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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