U.S. Senator Elizabeth Warren urges Department of Education to clear debt of defrauded Corinthian College students
March 25, 2022 – Washington DC – U.S. Senator Elizabeth Warren (D-Mass.), Democratic Senate Whip Dick Durbin (D-Ill.), Senator Sherrod Brown (D-Ohio) and U.S. Reps. Pramila Jaypal (D-Wash.) and Mark Takano (D-Calif.) wrote a letter to Secretary of Education Miguel Cardona, urging the Department of Education (ED) to quickly repay loans from borrowers defrauded by for-profit predatory colleges. and universities, including those operated by Corinthian College. Seven years after defrauded Corinthian College students were told their loans would be cancelled, tens of thousands of borrowers have not received help. Lawmakers have asked ED for an explanation for this continued delay and an update on ED’s timeline for discharging these loans.
Sen. Elizabeth Warren (D-Mass.)
“For the roughly 350,000 students defrauded by Corinthian, which closed its campuses in 2015, the wait for debt cancellation has spanned three presidential administrations. This is despite the findings of numerous state and federal law enforcement agencies, and the ED itself, of widespread Corinthian fraud that has left students with worthless degrees and mountains of debt,” write the lawmakers.
“ED has failed to deliver on its promise to defrauded borrowers, and it is time to act quickly and broadly to right this wrong,” conclude the legislators.
According to ED’s own findings, Corinthian misrepresented placement rates students between 2010 and 2014; systematically lied to students by telling them that they were guaranteed a job; and falsely assured students that credits they earned at Corinthian campuses would be transferable to other institutions. For-profit institutions have a long history of predatory recruitment tactics – according to a study, for-profit institutions enroll only about 10% of all students, but account for half of all student loan defaults. Black and Latino students are disproportionately impacted by for-profit institutions – they represent almost half of the students who attended for-profit institutions despite representing only about a third of all students.
An investigation by the Massachusetts Attorney General’s Office found that Everest Institute, one of Corinthian’s schools, lied to students about its programs and placement rates, then sued Corinthian in 2014. In 2015, Massachusetts Attorney General Maura Healy filed a class action lawsuit on behalf of Everest students at the ED, but the ED did not act. In 2019, the borrowers sued then-Education Secretary Betsy Devos and ED, and a federal judge ordered ED to forgive student debt, which the Trump administration appealed. In 2021, the Biden administration decided to drop the callpaving the way for 7,200 Corinthian students to obtain cancellation of their debt.
However, instead of providing deceived borrowers with a quick release, ED instead placed the onus on the borrowers, requiring each borrower to provide evidence proving they were defrauded, despite ED’s evidence of widespread wrongdoing by Corinthian. As of August 2019, the ED had received Borrower Defense Requests from 130,556 Corinthian students, just over a third of the 350,000 students likely to be eligible.
In May 2020, lawmakers introduced the Coronavirus Emergency Borrower Defense Act in recognition of the urgent need of borrowers to get their loans discharged. Lawmakers called on ED to quickly fulfill its promise to pay off loans from defrauded borrowers and asked ED to answer a series of questions about its plans to help Corinthian students and other defrauded borrowers by April 5. 2022.
Senator Warren is one of the nation’s leading voices for student borrowers, holding corporations accountable for predatory practices that hurt and trap borrowers through years of debt and leading the call for student debt forgiveness to boost our economy and help close the racial wealth gap for borrowers. .
- Sen. Warren, with Senate Majority Leader Charles E. Schumer (DN.Y.) and Reps. Pramila Jayapal (D-Wash.), Ayanna Pressley (D-Mass.), Ilhan Omar (D-Minn. ) and Katie Porter (D-Calif.) led more than 80 colleagues in a bicameral letter to the Department of Education asking him to release the memo outlining the legal authority of the Biden administration to cancel federal student loan debt and immediately cancel up to $50,000 in debt for federal borrowers.
- Sen. Warren, along with Senate Majority Leader Charles E. Schumer (DN.Y.) and Rep. Ayanna Pressley (D-Mass.) released new To analyse showing that resuming student loan repayments would take $85 billion out of the economy every year.
- Senator Warren, along with Senators Van Hollen (D-Md.), Blumenthal (D-Conn.) and Smith (D-Minn.), sent letters to four federal loan managers, requesting information on their plans to support borrowers when student loan repayments resume.
- Senator Warren, along with Senators Sherrod Brown (D-Ohio), Richard Blumenthal (D-Conn.), Tina Smith (D-Minn.) and Chris Van Hollen (D-Md.) sent a letter at Maximus, the company that is servicing Navient’s federal student loans contract, is questioning its troubling history and seeking assurances that borrowers will receive appropriate services and protections during the transition.
- Senator Warren, along with Senators Cory A. Booker (DN.J.), Sherrod Brown (D-Ohio), Bernard Sanders (I-Vt.), Richard Blumenthal (D-Conn.), Tina Smith (D- Minn. ), Chris Van Hollen (D-Md.), Tammy Baldwin (D-Wis.) and Edward J. Markey (D-Mass.) sent a letter to the Department of Education urging Secretary Cardona to use his authority to automatically remove all defaulting student borrowers.
- Senator Warren, along with Senators Van Hollen, Blumenthal, Brown, Smith, Edward J. Markey (D-Mass.) and Robert Menendez (D-NJ.) sent letters to the heads of the Pennsylvania Higher Education Assistance Agency, Granite State and Navient, calling on them to correct past mistakes with borrower accounts and address growing concerns about their readiness to transfer millions of borrowers to new services.
- Senator Warren, along with Senator Edward J. Markey (D-Mass.) and Rep. Ayanna Pressley (D-Mass.), published a report which detailed the continuing failures of the Civil Service Loan Forgiveness Program for Massachusetts civil servants.
- During a hearing in July 2021, Senator Warren pushed for the protection of borrowers after a major overhaul of the student loan service.
- In July 2021, Senator Warren released a statement regarding the termination of the Pennsylvania Higher Education Assistance Agency’s (PHEAA) student loan servicing contract with the Department of Education.
- On June 24, 2021, Sen. Warren and John Kennedy (R-La.) appealed to the CEO of PHEAA to address concerns about false and misleading statements made during a subcommittee hearing on student loans, chaired by Senator Warren.
- In May 2021, Senator Warren led her colleagues to send a letter requesting information on the actions taken by the Department of Education and the Federal Office of Student Aid (FSA) to help transition millions of federal student loan borrowers to repayment before the scheduled end of the pause on student loan payments and interest in September.
- In April 2021, Senators Warren and Raphael Warnock (D-Ga.) directed a group of colleagues in a letter to Education Secretary Miguel Cardona urging the Department of Education to take swift action to automatically remove all federally held student loan borrowers.
- That same month at his first hearing as Chairman of the Economic Policy Subcommittee of the Senate Banking, Housing, and Urban Affairs Committee, Senator Warren called PHEAA for its mismanagement of the government’s student loan forgiveness program.
- Senator Warren also interrogates Jack Remondi, CEO of Navient, on the company’s long history of abusive and deceptive behavior towards borrowers and their profiteering from the broken student loan system.
- Senator Warren was also keep calling for President Biden to use his current authority to write off $50,000 in student debt and highlighted data which she obtained from the Department of Education revealing the benefit of student debt forgiveness.
- In March 2021, Senators Warren and Bob Menendez (DN.J.) applauded the passage of their Student Loan Tax Relief Act as a member of US rescue plan. The provision makes any student loan forgiveness tax-exempt, ensuring borrowers whose debt is fully or partially forgiven aren’t saddled with thousands of dollars in tax surprises. While in the Senate, she helped return tens of millions of dollars tax-free to students cheated by for-profit colleges.
- She required that the Department of Education hold the student loan servicer, Great Lakes Education Loan Services, Inc., accountable for CARES Act mistake that likely lowered the credit scores of millions of borrowers.
- She worked with House Majority Whip James E. Clyburn (DS.C.) to close the racial wealth gap by introducing legislation, the Student Loan Debt Relief Actthat would cancel the student loan debt of 42 million Americans.
- She prioritized student debt relief and fought to lower interest rates on student loans, introducing the Student Loan Equity Act as his first bill in Congress.
- She conducted rigorous oversight of the for-profit college industry and helped raise three-quarters of a billion dollars in debt relief for students who have been cheated by predatory, for-profit colleges, including 4,500 Massachusetts students and more than 28,000 students nationwide.
Source: Senator Elizabeth Warren