Private college declares bankruptcy, its students can't
Democracy for America emailed this:
On Monday, 16,000 students at Corinthian Colleges learned that their school had closed its doors for good — and declared bankruptcy. Single mothers, veterans, and other students suddenly found themselves facing thousands of dollars in debt with no degree or job to show for it.
This was not by accident, but by cruel design. As the biggest for-profit college in the country, Corinthian has spent years promoting falsified data to promise high quality jobs and convince students to take out massive levels of student loan debt, despite the limited value of a Corinthian degree. Corinthian funneled this public student loan money to hire the best lobbyists in Washington, including Karl Rove’s Crossroads G.P.S., to stay one step ahead of state and federal investigations into their crimes.
With Corinthian’s decision to declare bankruptcy, they get to wipe the slate clean on their debts — but their students can’t do the same, as federal law doesn’t allow student debt to be discharged in bankruptcy. As a result, more than 16,000 students are saddled with millions of dollars in student loans and the government expects these students to pay up. Or else.
Congress has given the Department of Education the authority to discharge student loan debt in situations of this kind. But Education Secretary Arne Duncan isn’t taking action. He wants these unlucky borrowers to repay the loans. It’s unfair and unjust. These borrowers need our help. Let’s demand the Department of Education do the right thing — and discharge their debt.
Corinthian students are fighting back. They’ve banded together to form the Corinthian 100, an activist group that is demanding the government release them from having to pay loans to a college that no longer exists.
They’re not alone. Thirteen Senators, including Elizabeth Warren, signed a letter to the Department of Education calling for for-profit regulations to be reviewed and for the Corinthian students’ debt to be discharged.
The Department of Education met with representatives from Corinthian 100. They slapped Corinthian Colleges with thousands of dollars in fines. But the government still refuses to free these students from their debts. Despite years of corruption perpetrated by Corinthian, the Department of Education thinks that Corinthian students should simply transfer to other crumbling for-profit colleges. It’s important to note that the Department is steering students towards schools like Devry and the Art Institutes, despite sweeping campus closures in recent weeks.
These students are victims of a greedy and unscrupulous for-profit industry. They deserve relief from their debts. Will you stand with them?
Thanks to the support of Americans like you, and progressive leaders like Senator Elizabeth Warren, we have new momentum in the fight to make college debt-free and save American families from the crushing burden of student debt. Fighting back on behalf of the Corinthian students will not only help stop for-profit colleges from continuing to prey upon hard working Americans seeking a better life, but will go a long way towards fixing the entire system.
– Natalia
Natalia Abrams, Executive Director
Student Debt Crisis