Debt Relief for Corinthian Students—How We’re Working to Protect Taxpayers

Earlier this week, the U.S. Department of Education announced a new debt relief process for Corinthian Colleges’ students, and new steps to protect students and taxpayers from abusive career colleges.

Corinthian Colleges, Inc.—which operated schools under the names Everest, Heald, and Wyotech—has been the target of consumer and taxpayer protection enforcement efforts by the federal government and other authorities. The Department of Education investigated and found that between 2010 and 2014, Heald College misrepresented the job placement rates of many of its programs. Investigations by other entities are ongoing. Over the past year, Corinthian sold off many of its schools, and the remaining campuses closed shortly before Corinthian went bankrupt.

Here are a few resources from the announcement:

There is a lot of information in the links above, and we’re working to address additional questions through student outreach, social media and our website.

One question that we continue to see on social media and through comments on our blog is how can we prevent taxpayers from footing the bill, and ensure that colleges that are bad actors have some “skin in the game.”

The law makes clear that students who have been hurt by illegal acts by schools are entitled to debt relief, and we’re working to make sure that students who were defrauded do not suffer more than they already have. The Obama Administration is committed to making schools accountable through aggressive enforcement of the laws and regulations.

Over the last six years, the Obama Administration has taken unprecedented steps to hold career colleges accountable. We’ve cracked down on bad actors with enforcement and through investigations. We issued “gainful employment” regulations to help ensure that students at career colleges don’t end up with debt they can’t repay with a degree they can’t use. And we’ll continue to hold institutions accountable in order to protect students and taxpayers.

Earlier this week during a call to reporters, Secretary Arne Duncan said that “we are determined to protect students who have been victims of these unethical companies, by ensuring they get every penny of the debt relief they are entitled to, through a streamlined and straightforward process. We’re going to make that as simple as we legally can, while also safeguarding the interests of taxpayers.”

But the Department of Education can’t fully address this issue on its own. As part of this week’s announcement, Secretary Duncan called on Congress to do its part by strengthening consumer protections for students and accountability for colleges. During his press call, Duncan explained that we all have a role to play: 

“We can no longer tolerate a situation where all the risk in higher education is borne by students and taxpayers, while members of Congress accept money from the industry and block change. We need Congress to stand with us on accountability, and we have to find ways so that states, colleges, investors and the federal government all have incentives to ensure student success. It’s going to take all of us.”

This week’s announcement for Corinthian students isn’t the beginning, or the end. It’s one more action by the Obama Administration to ensure higher education is affordable and that students are prepared for a career and life. Secretary Duncan looks forward to working with Congress to make this happen.

10 Comments

  1. Hello Mr. Brenchley,

    What happened to students who graduated in 2004 from Florida Metropolitan University which is now Everest? I was not successful at obtaining employment with my degree because employers did not trust graduates from FMU because of the commercials. I had to resort back to receptionist and data entry jobs, What should I do?

  2. Any help for University of Phoenix students? I graduated from UOP in 2010 with a BBA. I have not found work with my degree. I lost my house in 2012. I have been homeless since. A friend recently took me in and helped me find part time employment. I have tried employment agencies, but they will not honor my UOP degree. I applied for loan rehab through Naviant (the holder of my defaulted loans) but I do not qualify for loan rehab – though I have been homeless. Can someone at the Department of education tell me where to start a manageable defaulted loan repayment?

  3. Is there any help for University of Phoenix students. I graduated with a BBA from UOP in 2010. I have not found work with my degree. In 2012, I lost my home in foreclosure. I have been homeless. Recently, a friend took me in and I found part-time employment (but still not in my degree field – beggars can’t be choosers). Now, some of my loans have defaulted. I have tried to get loan re-hab help but my defaulted loans disqualify me. Even if this posting is not published. Could anyone at the department of education guide me on what to do concerning loan repayment? My email is shannahlaine@gmail.com. * I have tried employment agencies and employers will not honor my UOP degree.

    • Alan — You may be eligible for partial or full Borrower Defense loan discharge of your Direct Loans if the school you attended did things, or failed to do things, that would amount to fraud, or otherwise justify a legal action against the school under applicable state law. This process is called defense to repayment, and the law requires borrowers to submit a claim. Please visit http://www.studentaid.gov/corinthian for more details.

      Cameron Brenchley
      Office of Communications and Outreach

  4. What about those who were in similar schools like Corinthian College? There are hundreds of thousands of us who have been badly screwed over by these colleges with their false promises, sky high rates, and substandard education. Virginia College is one of these kinds of schools. Our Department of Education needs to step up and help us. They need to stop these predatory colleges that have non-transferable credits that promise that are transferable until you actually try to transfer them. I will be paying my student loans until I am in my 50’s for a Bachelor’s degree! Instead of saving for retirement, I am paying off my student loans.

    • Michelle, over the last six years, we’ve taken unprecedented actions to establish tougher regulations to prevent misleading claims by career colleges. We issued new regulations and we’ve cracked down on bad actors through investigations and enforcement to protect students and taxpayers. But we can’t do this alone. Secretary Duncan has called on Congress to do its part by strengthening consumer protections for students and accountability for colleges. Read about how we’re working to protect students and taxpayers.

      Cameron Brenchley
      Office of Communications and Outreach

  5. Are you kidding me? The June 9, 2015 Sacramento Bee Article states that the Dept of Education had known that fraud was occurring at Heald College for years and failed to inform inquiring students of the investigation! The article says you guys have already determined many programs at Heald were misrepresented (which means you had suspicion for quite some time) and yet your failed to at least inform potential incoming students of your concerns. My daughter started heald in October 2013. If we had know something was “fishy” we would not have invested nearly two years of her life n the program. Your actions are shameful and you should be embarrassed! Unbelievable!

  6. the issue with corinthian college how far does this issue go back? how do you know if you qualify for the debt relief

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