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U.S. student debt strikers have slammed the federal government's new debt relief plan for students defrauded by their private colleges, saying the proposed process to forgive Corinthian Colleges students' debt is overly complicated and doesn't do justice for students who were victims of debt schemes.
“Just as Corinthian Colleges portrayed its programs as a path to a better life when they were in fact debt traps, the Department of Education is portraying a process that re-victimizes students as a solution to a problem they created,” said the Debt Collective, which organized a Corinthian students' debt strike, in a statement in response to a Department of Education announcement Monday.
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The Department of Education outlined the details of the debt relief aimed at helping victims of “abusive career colleges,” specifically students of institutions operated by the for-profit education company Corinthian Colleges, Inc. The loan forgiveness plan is open to tens of thousands of students of schools that closed down in the lead-up to Corinthian filing for bankruptcy last month, as well as students who were victims of fraud.
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The Dept. of Education has released news regarding #4profit Corinthian Colleges and the #Corinthian100. pic.twitter.com/jbHPni49n5
— Higher Ed, Not Debt (@HigherEdNotDebt)
June 8, 2015
While Education Secretary Arne Duncan says the plan is intended to help students erase unfair debt as “efficiently and easily as possible,” not every Corinthian student loan is will qualify for relief.
In place of the federal government plan, which the Debt Collective characterizes as a “bureaucratically tortured process” that subjects debt-burdened students to a complicated process of “unnecessary red tape,” critics call for immediate and automatic debt relief for Corinthian students.
“Automatic, class-wide discharges are not only just, they would also serve as a corrective for the Department's flagrant failures to allocate public funds wisely,” said the Debt Collective in a statement. “An automatic, class-wide discharge for defrauded Corinthian students would not cost taxpayers, as it would be offset by government profits on the student loan program.”
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Corinthian Colleges, formerly among the country's largest private for-profit education companies with more than 110,000 students at Everest, Heald, and Wyotech career colleges across the country, has been investigated for fraud in at least 20 U.S. states. It has also been the target of dozens of lawsuits, many of them class action, condemning Corinthian for predatory lending, deceptive marketing, falsifying documents, and lying to students about career opportunities and future expected earnings, among other charges.
At the Department of Education's demand, Corinthian sold off the majority of its 100 campuses in June 2014, affecting some 72,000 students. It closed its remaining campuses in April, abandoning another 16,000 students in the midst of their schooling as the colleges shut down on a day's notice.
Remember how cool we all thought it was to abolish millions of $ of debt. That was cute. We're working on billions now. Tomorrow, trillions.
— StrikeDebt (@StrikeDebt)
June 9, 2015
Skyrocketing student loan debt in the U.S. totals over US$1.2 trillion, with about 40 million borrowers with outstanding student loans.
According to the Debt Collective, over 1,200 student loan borrowers from across the country who attended various public and private institutions have pledged to strike on their own loans in solidarity with Corinthian students.
Debt Collective and other debt relief advocates see the case of Corinthian as representative of a larger predatory debt system in U.S. higher education that, according to the organization Strike Debt, “works to increase inequality, undermine democracy, and ruin lives.”
@arneduncan Government officials knows Corinthian is the tip of the iceberg.Students being buried in unpayable, unjust loans @0debtzone
— Paul Hicks (@Strike_Back_Now)
June 9, 2015
