Durbin, Blumenthal Statement on ED Decision to Grant Relief to Over 1,300 Students Following Collapse of Corinthian Colleges

[WASHINGTON, D.C.] – U.S. Senators Dick Durbin (D-IL) and Richard Blumenthal (D-CT) today called the Department of Education’s approval of more than $28 million in federal student loan debt relief of 1,312 students of former Heald College – which was part of the collapsed Corinthian Colleges, Inc. system –evidence of progress for students.  To accompany today’s relief, the Department of Treasury issued guidance that ensures federal debt relief for Corinthian students will not be considered taxable income.


“We appreciate today’s assurance from the Department of Treasury that Corinthian students will not face a tax bill for federal student loan debt relief.  Anything else would be unfair,” said the Senators.  “The Department of Education’s approval of relief today is welcome news for some 1,300 former Heald students, but there are thousands more across the country who deserve the same relief.  We encourage the Department to step up the pace and scope of its Corinthian debt relief efforts to give those students the relief they deserve under the law now.”


The Senators have been calling for federal student loan relief for Corinthian students since the company collapsed more than a year ago.  Durbin and Blumenthal joined 16 other Senators earlier this month in a LETTER urging the Department of Education (ED) to grant immediate, class-wide relief to former Corinthian Colleges, Inc. students following a recent federal district court ruling that the for-profit college chain broke federal consumer protection laws. Their letter came after a federal judge for the U.S. District Court for the Northern District of Illinois issued a default judgment against Corinthian Colleges, finding that it violated the Consumer Financial Protection Act of 2010 (CFPA) ban on deceptive practices by misrepresenting job prospects and career services available to students to induce them into taking on debt.  The company then engaged in predatory collections practices that directly interfered with the educational services for which students were paying.