Santa Ana – PLC clients, mostly young women of color, finally received justice yesterday when the U.S. Department of Education discharged $5.8 billion in federal student loans for former students defrauded by Corinthian Colleges. Since 2015, PLC has assisted over 50 former Corinthian students through our Consumer Law Unit.
“As of today, every student deceived, defrauded and driven into debt by Corinthian Colleges can rest assured that the Biden-Harris Administration has their back and will discharge their federal student loans,” Education Secretary Miguel Cardona said. “For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep.”
Many of PLC’s clients were the first in their families to pursue higher education and were mislead by Corinthian salespeople starting in high school. The low quality education they discovered on campus was exacerbated by constant new student enrollment with no class size limitations and very limited career development services. In fact, many clients reported purposely not including their attendance at Corinthian Colleges on their resumes or even being told by employers to remove their attendance from their resumes.
PLC assisted former students with requests for discharge of their student loans using the borrower defense to repayment application process. None of PLC’s clients qualified for a closed school discharge, because they were not enrolled at the time the school closed (or within the specified time period prior to closure). Borrower defense existed in law, but the application process and determination was created in 2015, so PLC clients were test cases in many ways.
PLC tracked these cases over the years, joining as an amicus when the prior administration tried to justify “partial discharges” based on the student’s current income and working with advocates around the country to find ways to get the Department of Education to recognize the harm that these students have endured. A few PLC clients received partial or full discharges over the last 7 years, but many had to wait until yesterday for justice.
“The news from the Department of Education is fantastic, but a long time coming. The debt discharge will provide substantial relief for PLC’s clients who have been waiting for seven years for justice. At the same time, PLC has many more clients, who have attended similarly predatory schools like ITT Tech or the Art Institute, who have been waiting for more than five years for relief from the Department,” said PLC Director of Legal Services Leigh Ferrin.
If you are a former Corinthian student who has outstanding student loans and you have questions about this announcement, contact PLC’s Consumer Unit at (714) 541-1010 x366. To view the Department of Education’s press release regarding this matter, please click here.