This past February, America’s first student debt strike took place when 15 former students of Corinthian Colleges Inc. joined forces. The students refused to pay their student loans, claiming that the degrees they had earned were worthless and the company had used fraudulent marketing and recruitment practices. Other students also joined the strike and soon organizations like the American Federation of Teachers and Jobs with Justice had endorsed the students’ cause.
In May, Corinthian filed for bankruptcy. Arne Duncan, Education Secretary discussed the debt relief plan for some former Corinthian students. According to Duncan, Corinthian brought the ethics of payday lending into higher education and preyed on vulnerable students, leaving them with debt they could never pay. In fact, a third of Corinthian students came from families that earned less than $10,000 per year.
For the strikers, this was a grand victory. However, many feel that the Education Department has not done enough to fully correct the situation. Unfortunately the department is not issuing a complete discharge of debt to all former Corinthian students, which means some students may be left out. To receive relief, most students will have to apply individually and will be required to furnish transcripts and other documents that may be difficult to obtain, since the campuses have shut down or been sold. They must also spell out what parts of a state law that Corinthian violated in their particular case.
For many of the students, this has proven to be complicated and confusing for them. The Education Department has not advised the students of their options and many Corinthian students are not even aware of the debt relief program. In a recent report by the New York Times, only 6% of students have asked for debt cancellation. It seems that the Department of Education does not want to cancel potentially millions of student loans, however many find it absolutely necessary.
This is not the first time Corinthian has come under fire. Corinthian has had a long history of past allegations against them. In 2014, the Education Department accused Everest College of lying to students about job placement rates and briefly cut off federal funding to Corinthian. However, after the company said it could not survive even a few weeks without the public money, the Education Department continued funding Corinthian while they sought a buyer. That same year, the federal Consumer Financial Protection Bureau (CFPB) sued the company for operating a predatory lending scheme.
For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.