The Education Department Is Failing Students Who Got Defrauded

So far, just a handful of students have seen their loans forgiven, despite a supposedly streamlined process in the Corinthian scandal. Many students are being left out.

Op-Ed (NATIONAL, New York)

David Dayen
Fiscal Times
July 24, 2015
Full story

Tags: Consumer Protection, Loan Forgiveness, Student Debt

Organizations mentioned/involved: Empire Justice Center


There is a very precise profile of a Corinthian student, according to Peter Dellinger, a lawyer for the Empire Justice Center in New York, a civil legal aid outfit assisting former students who attended Corinthian’s Everest Institute campus in Rochester, New York. “We represent 15 people,” Dellinger said. “They’re all women. Most of them are mothers. Almost all of them got GEDs. All of them were promised a career.”

These are not people with the skills to act as a lawyer or private investigator. Yet that’s what the Education Department’s loan forgiveness process demands. Students whose schools shut down are eligible to have their loans forgiven, as long as they forfeit the possibility of using credits achieved there in a transfer. But under language in student loan contracts called “defense to repayment,” students who take out loans to attend colleges that defraud them can apply to have those loans cancelled. The Education Department and multiple state investigations have documented this fraud painstakingly, even fining Corinthian, which is now bankrupt, for its actions.