Debt Relief for Corinthian Colleges Students

Too many of America’s large “career colleges” are failing to live up to the name. Rather than providing students with the opportunity for a solid education that leads to a good job, some of these institutions — often run by for-profit companies — have left students with lots of debt and few job prospects, putting both students and taxpayers at risk. This Administration is committed to changing that, through action to hold institutions accountable and to ensure Americans are protected from unscrupulous colleges that deny students meaningful educational opportunities and leave taxpayers holding the bag.

Over the past six years, the Department of Education has taken unprecedented actions to establish tougher regulations to prevent misleading claims by career colleges. The Department also issued “gainful employment” regulations, which will help ensure that students at career colleges don’t end up with debt they cannot repay. This Department has also cracked down on bad actors through investigations and enforcement to hold colleges accountable in order to improving the value of their programs, protect students from abusive colleges, and safeguard the interests of taxpayers.

College remains the best investment students can make in their future – and students deserve a fair and honest deal. And some for-profit career colleges play a critical role in helping students succeed in their educational and training pursuits. However, when unscrupulous companies take advantage of students, federal and state agencies must step in, and Congress must support those efforts.

Secretary Duncan has directed our team to ensure that students who have been defrauded by their college, or because their school closed down, receive every penny of the debt relief they are entitled to, as efficiently and easily as possible. That need has grown pressing in recent months because of the wind down and ultimate collapse of Corinthian Colleges Inc. (known under the brand names Heald, WyoTech and Everest), following enforcement actions by this Administration and scrutiny by other enforcement entities. Today, our Department is announcing next steps to support students who attended Corinthian schools. We are also committed to ensuring accountability and to continue working aggressively toward reforms that ensure that schools are held responsible for their actions.

How debt relief will work for Corinthian students

Our team has been at work to develop a streamlined process for getting debt relief to Corinthian students. Our aim is to make the process of forgiving loans fair, clear and efficient.

Some Corinthian schools closed down, while others were sold but remain open. We are establishing plans to ensure debt relief for:

  • Students whose schools have closed down
  • Students who believe they were victims of fraud, whether their school closed or not

These processes are described in our fact sheet and are summarized here.

Information for students

If you are a Corinthian student seeking debt relief of either type, please visit the FSA website or call toll-free at (855) 279-6207 and a staff member will provide the information you need.

For Corinthian students whose schools closed

Students who were enrolled at Corinthian schools that closed can now choose between discharging their student loans (called a “closed school discharge”) and transferring their credits to another school. We are reaching out to the affected students and providing clear information and loan discharge applications on the FSA website.

Normally, only students who withdrew (without completing their programs) within 120 days of a school’s closing, or who were attending the school when it closed, may receive a closed school discharge. Today, we are announcing that the Secretary is exercising his discretionary authority to extend that time frame to include students who withdrew from one of the closed schools on or after June 20, 2014. That is the date when Corinthian signed an agreement with the Department to close or sell all its schools.

If they believe they were defrauded, students whose schools closed may opt for debt relief under borrower defense, as described below, rather than closed-school loan discharge.

For those who need help with closed-school debt relief, the Department is working with an independent group of organizations and institutions, including the California State University System, the California Community College System, Beyond 12, and financial aid counselors, who have teamed up to create a volunteer advisor corps to help Corinthian students navigate their options. Contact them at NextStepsEDU.org to talk to a volunteer advisor. The Department did not create this corps and there may be other organizations that are available to help students. We encourage all students to investigate the best available avenues for assistance.

For former Corinthian students who would like to seek debt relief because of fraud, including Heald College students

Borrowers can make a claim for debt relief because of fraud under a legal rule called “borrower defense to repayment.” This rule requires students to show that they were defrauded by their college under a state’s laws, and we are committed to working with students to make that the simplest, fastest process possible.

In order to ensure that students do not fall behind on payments or default on their loans before claims can be resolved, we will offer all applicants for debt relief the option to go into loan forbearance (a special permission to stop payments), and for students in default, to halt collection activity.

In order to promote efficiency in the resolution of claims and to minimize the burden on students, wherever possible, we will work to use legal findings applicable to groups of students (for example, an entire academic program at a specific campus) to resolve students’ claims. As a first step, in this particular case, the Department has already established that Corinthian misrepresented job placement rates for a majority of programs at its Heald College campuses between 2010 and 2014. Today, we are announcing that these serious findings entitle the defrauded students enrolled in these programs to a discharge of their Federal Direct Student loans, based on a simple attestation that they relied on those fraudulent rates. And we are providing a simple form that will allow students to quickly give us the information we need to give them debt relief.

Going forward, the Department will appoint a special master to oversee borrower defense issues and charge that person with ensuring our process is clear and fair, including a simple, streamlined application for debt relief.

Holding Institutions Accountable

America’s students deserve protection against unscrupulous companies that leave students deep in debt, and with few prospects for employment. Our Administration has taken and will continue to take aggressive steps to protect students and to hold schools accountable, including:

  • Establishing new student aid rules to protect students and taxpayers, to ensure students receive an education that leads to good job prospects.
  • Strengthening oversight and compliance through inter-agency and Department teams focused on monitoring for-profit institutions.
  • Creating options that make student debt more manageable for borrowers, through flexible repayment options such as the Pay As You Earn plan, which caps student loan payments at 10 percent of a borrower’s discretionary income
  • Protecting military service members, veterans and their families from predatory actions by for-profit colleges
  • Providing families with clear information to make a smart college choice, by providing a wealth of consumer tools designed to help students and families decide which college is right for them

It is impossible not to be moved by the stories of students whose futures were damaged by the institutions they once believed were setting them on a path to a better life. These processes will offer them real and badly needed help. Loan forgiveness can’t give students back the time they invested at Corinthian. But it will help them make a fresh start.

Ted Mitchell is U.S. Under Secretary of Education.

29 Comments

  1. I am currently a senior in college. I have been denied any further student loans because I’ve reached my aggravate loan limit. I have reached this limit because I attended heald college Honolulu in 2010. I withdrew from heald college because they are salespeople and liars. I have no idea how I am going to come up with my tuition before the start of the semester. I am thankful that there are people out there who care enough to fight for all of us that have been misinformed, lied to and cheated. To those who have stood up for and fought for us, Thank you.

  2. I’m a true former student of the corrinthians colleges. I was taking classes back in 2002-2003 for a diploma. Now my students debt to pay back is over $22,000.00. My loan went through sallie mae and was then sent to navient just recently. I e-mailed them about this and they just sent my payment slips. I just found this site to post my comments and am still mad at them. They were very aggressive about filling that quota to get students in per month and I was one of the suckers and now I’m stuck, been paying back this loan and have about 25-35 more years to pay, just paying the minimum because the work they promised to find me after graduation was a lie. NOW, can somebody help me or is it too late for me?

  3. I have been told I am not eligible for borrower defense to repayment since my loans are not Federal Direct Student loans and I am not eligible for them. Help, what can I do my loans are with Nvient.

  4. I am not so disappointed in the education I received- but more so in the fact that I was clearly ripped off. Just a few years back our financial information with the school was not even available on line. This is when my battles started with them and I am sure there is a tape or two with a recording of my frustrations, questions and concerns. From my figuring I believe they were getting about 3,000 extra from me every couple of semesters. The computer that I got always needed repairing and I was to;d that it was so old that a tech had to come to my house to repair it in person. Did so on four different occasions. I could go on and on but I won’t I just hope these thieves get what they deserve!

  5. For anyone completing the attestation form (Heald students) at Federal Student Aid, Dept of Education. When completing the attestation form for the Heald college students, what are they expecting to get from the Section III: Other Information: “Please provide or attach any other information about your experience at Heald College that you believe is relevant:” Is this required?

  6. In addition to financial issues, Corinthian has credentialing issues.

    Edna Dolatre was the appointed dental director at Heald College at their Hayward campus. She acquired her RDA license by fraud. The Registered Dental Assistant license is required by California law. Her RDA license application lists Dr. Garcia and her cousin, Dr. Helen Dolatre, as having worked for them for the prescribed period of time. However, her resume on file with the California Dental Board does not show she ever worked at either dental office. Further, Dr. Garcia has stated she never worked for him.

    Edna Dolatre’s Pit and Fissure Sealant license, required by law, is signed by Ms. Ortiz. However, she never took this required course. Rather, she had Ms. Ortiz sign for this without ever attending class.

    Ms. Edna Dolatre also assigned an instructor, Ms. Dungca, who was not licensed or credentialed to teach the Pit and Fissure Sealants course. She latter helped Ms. Dungca fraudulently obtain a Pit and Fissure Sealant certificate, who also never showed up for class.

    Ms. Edna Dolatre mandated students call and refer to her as Dr. Dolatre. However, she does not have a doctorate degree.

    Documentation can be obtained by fax: (510) 889-8395

  7. Everest was aggressive about recruiting students.
    Really, really aggressive.

    From a student of Everest College: “[The representative] called me every day at any time during the day or night to tell me that career will change my life.
    Guess what? It didn’t!

    It also recruited students without high school diplomas or GED.

    The college using deceptive tactics to get students to sign up for classes. Advertisements and recruiters consistently told students that there was “limited space available” and that they would miss their chance to sign up, forcing them to wait a full year to start the program, unless they enrolled immediately. Everest didn’t actually turn away students because of limited space and classes start once a month.

    Everest misrepresented the kinds of opportunities their degrees provide.
    Everest recruiters said that their credits were transferable to all accredited schools.
    In fact, most schools do not accept any of Everest’s credits.

    Everest also “made material and false” statements about the availability of internships in career programs.

    It also misrepresented the wages that graduates would earn, citing wages that were several dollars an hour higher than state averages.

    Its employment rates are falsified.

    Everest recruiters told students that they were “guaranteed” to obtain jobs after graduation.
    The job placement rates Everest actually reported were much less than the implied 100%, those were false.

    Its degrees are really expensive — more than similar programs at community colleges and even other for-profits.

    Senate records show Everest’s tuition prices are among the highest of for-profit schools. Diploma programs in Massachusetts cost up to $19,000, plus books and fees.

    Almost all Everest students funded their education with federal grants and loans. They often can’t pay off that debt, so they go into default: Though they make up only 12% of students nationally, students at for-profit schools comprise almost 50% of loan defaults. The government has a particular reason to care: Most of that debt are from taxpayer money.
    In 2010, 89.8% of Corinthian’s $1.76 billion in revenues came through federal dollars.

    In a statement, Corinthian said Everest “has a strong record of offering students a quality education and treating their students honestly and fairly.”

  8. DOE needs to provide blanket relief to all 350,000 former Corinthian students without requiring any of those students to file out a single piece of paper. DOE should not require former students to apply for relief. Relief should be granted to them en masse.

  9. What about all of us who graduated from state universities who took out student loans and haven’t been able to find jobs? Are you going to hold them accountable for Gainful Employment rules, too? Why just for-profit schools, when all these other schools have the same problems getting students placed in jobs?

  10. What is wrong and what is WRONG? WRONG..Schools that are closed down for fraudulent practices get to file for bankruptcy protection..I’m talking about Corinthian schools and even old schools like Masters Institute while the students can’t file for the same bankruptcy protection.

    wrong how the government recognizes now for this students that this is wrong and has a debt relief program for them but for students that the same thing happened to during Master Institute closure and other online fraud schools they just asked students to repay and even take them to collections.

    just saying..

  11. I MISTAKENLY enrolled at Heald as a part time student. They raised tuition on me about three times saying that it was only raised on part time students in order to encourage students to enroll full time. So, students who work and have children are penalized for not being able to go full time. Also, I’m a teacher who kept getting laid off due to budget cuts. When I went to inquire about enrolling, I was told that medical assistants make a comparable salary to a teacher. Little did I know that at the end of my time at Heald, I would be $40,000 in debt for a $12 an hour job that I can’t even get, because Heald failed to tell me that when my program was over I couldn’t get hired for a job unless I have two years of experience. My time at Heald was a total nightmare. Who do we contact about this process of debt relief? I can’t seem to find any contact information anywhere…

  12. I am a graduate of FMU – Corinthian College now called Everest University Brandon, FL campus. I graduated in 2007 with an AS in Business Admin and was mislead from the beginning. I have paid off a private loan and still owe 22,000 loan owned by Navient aka Sallie Mae. I am hoping to find out more about Florida state law and if I will qualify for the defense to repayment loan discharge. Where do I find the law pertaining to this? Thank you in advance!

  13. I’m glad to see the government is standing up for these students. I graduated in ’04 from Everest college. I have had to put my loans in forbearance several times. Does anyone know if past students will get help?

  14. I am wondering about The Art Institute of Pittsburgh on the same level as these other colleges– took online courses, worked on assignments all hours of the night to meet deadlines, had a 3.9 GPA, and all of a sudden they tell me oops, you are outta money, and you can’t borrow any more to get your degree. Then later on when I don’t take out private loans to complete the degree they e mail and call me trying to ‘audit’ me a degree if I only come up with another 40,000 bucks. Meanwhile I pay out of pocket to see if I can finish the degree at the local community college and the head of the design department can’t even reconcile the credit hours because they vary so much from online to regular courses. My adviser at the online college ( one of about ten different ones I had over the whole time I went) refused to even send me paper copies of some of the course syllabi from past courses I took so my new adviser at the community college could get an idea of what I had already done and what more I needed. So now I am screwed, no degree, no way forward, and huge debt. No one at AI will work with me to solve the issues.

  15. Since you guys have been investigating these schools since as early as 1995 you guys have all the info to prove these schools violated title 22! Corinthian should have to pay for the crimes they committed just like we would if we lied or committed fraud. Once again students take the brunt of the weight! Ted this is a small step in the right direction. A class wide discharge would have been and still is the right thing to do!! Any students who want to connect with other Corinthian scam victims please go to debtcollective.org and also the fb page Everest college avengers. we are all in this together. Strength in numbers!! Solidarity

  16. I graduated from Everest institute in 2010. Hoping to get a good Job in my major. Well after trying to apply for these jobs I was not qualified I am a server for years and still am. I’m so upset now I have loans of 27,000.00 thanks for nothing Everest.

    • With ya Lisa. I graduated in 2009 with a “degree” in Accounting. I applied to jobs every day and didn’t even get an entry level position. Finally found work on my own with Liberty Tax Services in Florida. A seasonal job at best. I have applied every year since, and still no accounting jobs. My loans grew from $29,000 to $34,000 just from interest while I was getting Deferments, and Foreberance relief. With most jobs paying < $12/Hr I'll never get them paid off. I am definately applying for that "borrowers defense discharge" I had a 3.92 gpa and couldn't find a job in my degree ever. I am so pissed at Everest for misleading me.

      • Everest mislead me from the point of beginning. I hold a bachelors and masters from them and can’t find a job worth squat. I am stuck working a minimum wage job just to survive. Why??? they promised me a job after graduation. I graduated in April 2015 and I am still waiting. Career services still contacts me but it is a different person each time and it is like the left hand does not know what the right hand is doing. Those of us current and former students should be given loan forgiveness because it is ridiculous that we have to pay back the loans that gave us a worthless education and a crap load of debt.

  17. I have been going through a lot with my loan. I still don’t don’t understand a lot of things, I send in paper work that I was not given honest information. I didn’t and still don’t have my GED I have a felony with hold of justification. They keep selling my loan to these people that keeps calling me all time of day and night as late as 8:56pm. I am so afraid that they will once again take the money out of my account as they did in the pass. Please I need your help. (954)245-5952 I hope to hear from you

  18. I graduated from a Corinthian College in Jonesboro, Georgia. I have been told that because of the school’s reputation that I would never obtain a job as a medical assistant. In the nine years since, I have returned to school and obtain a CNA certificate, but the government has started garnishing my wages due to unpaid student loans. When I took my state registration exam, I would have failed had I not obtained a study guide. The college has not once called me to see how I was doing, career center help, yeah right. Some of the instructors were horrible. I should have listened to my family and friends when they said it was a bad idea. I currently owe $8,665.50 on my loans. If that is erased I can go back to school for even higher, BETTER education.

  19. I am glad they are starting to do something about this. I attended a college called FLORIDA METROPOLITAN in Tampa , and it too did the same thing and ended up closing. Then found out it was bought by the same people that own EVEREST University which is Corinthian Colleges. You get all these loans, take classes, then no one will accept the degrees from there and then the school’s close…..

  20. Does this include former students? I have what is now a useless piece of paper that was a degree. I was never able to transfer my credits to further my education at any state or SACS accredited institution. Will the Department of Education be working with SACS accredited institutions to allow the transfer of credits?

  21. I was a former student of everest and I stopped because of an issues I was facing and i asked the school not to schedule me for any classes I have since paid the school because they told me that I owe them before I could get my credits transferred. The reason why I am asking is because I since been asked to fill out a form of unusual history and yes I did apply for financial aid when i was attending. Just trying to figure out if the school received payment from the loans I took out and also the financial aid as well. Thank you for looking into this matter and I look forward to hearing from someone.

  22. This if fabulous. For profit education should be shut down, beginning with its government subsidies and subprime loans.

    Now, if we can just get the DOE to pay attention to the bank frauds–Sallie Mae/Navient and the rest of them–whose practices are equally horrific and punitive.

  23. “It is impossible not to be moved by the stories of students whose futures were damaged by the institutions they once believed were setting them on a path to a better life.”

    No, it’s entirely possible. Since when do taxpayers pay for fraudulent damages between two independent parties? This is a disgusting power move that resembles TPP in the negligence it delivers to citizens. If you got defrauded by Corinthian, first, you’re a fool, and second, you can sue them for damages, but why the public, as well?

    Just more politicians buying votes with public money.

  24. What about the distance education non-ABA California for-profit schools? So, what happened to your enforcement powers against Concord Law School? The DEAC closed a case stating they found no violations. I believe there were many! But, if DEAC had found any violations, then they would lose substantial accreditation fees. Check into their claim

  25. As a former student and graduate of Everest College, I am pleased to see the issues I raised back then proved to have been the same reasons these schools has closed and is now creating a resolution for justice to us students. I just hope these standards help the students like myself who were lied to and that each student receives their debt relief. Promises of graduation ceremonies, job placement, life time use of their career services programs and placements, and financial issues needed to be rectified have now come to light! I just hope the discrepancies will be resolved and that I am afford the loan discharge as the school should be held accountable and undeserving of any dollar they obtained as a result!

  26. What about schools like Kaplan Career Institute, who shut down on their own in Michigan, but knowingly continued to enroll students who they knew would not be provided career services assistance?

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