Durbin Calls for Federal Debt Relief for Former Everest College Students
[CHICAGO] – Nearly a year after Corinthian Colleges began to collapse under the weight of its own wrongdoing, U.S. Senator Dick Durbin (D-IL) called on the U.S. Department of Education to provide meaningful federal debt relief to students who attended the school’s local campuses, branded as Everest College. Illinois students who attended Everest College are not currently eligible to discharge their federal student loans because the Illinois campuses were sold as opposed to closed. Durbin is urging the Department of Education to take additional action to allow Illinois students wronged by Corinthian to file defense to repayment claims and receive loan forgiveness and for the Department to develop a simple, borrower-friendly process for these students.
“For years Corinthian lured students with flashy ads and misleading promises, leaving them with mountains of debt and little to show for it in the way of a meaningful education. Corinthian’s fraudulent behavior has left thousands of students in financial desperation. We can’t simply write these students off as collateral damage and move on,” Durbin said. “All Corinthian borrowers should be eligible to assert a defense to repayment and I have encouraged the Department to create a process that is simple and borrower friendly. Borrowers shouldn’t need a lawyer to be able to apply for or receive relief. These borrowers have already been victimized by Corinthian, they shouldn’t be victimized again by the government.”
The Department has not officially responded to a letter Durbin joined Senator Elizabeth Warren (D-MA) and others in sending calling for the Department to recognize Corinthian’s fraudulent job placement disclosures to students, accreditors, and the federal government as a defense to repayment for students. Students at the Corinthian campuses already sold, including all the Illinois campuses, will not qualify for closed-school discharge, leaving a defense to repayment claim as the only possible relief of their federal loans.
Last week, the final 28 Corinthian campuses across the nation closed. At the time of closure, they were still participating in the federal Title IV program – receiving taxpayer dollars and in several states, continuing to enroll new students. Corinthian was under investigation by the Securities and Exchange Commission, the Department of Justice, and at least 20 state Attorneys General, including Illinois Attorney General Lisa Madigan. They were sued by the Consumer Financial Protection Bureau and the state Attorneys General of California, Massachusetts, and Wisconsin for false and misleading advertisements. All the while, the institution raked in more than a billion dollars from taxpayers a year.
Durbin has been working since 2009 to protect students from the predatory practices ofthe for-profit college industry. The industry receives more than $25 billion in federal dollars which is enough funding to make it the ninth largest federal agency. While they enroll only about 10% of all college students, they take in 20% of the Department of Education’s federal student aid funds and account for a disproportionate 44% of student loan defaults.
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