Between July 2014 and April 2015, Corinthian Colleges closed its over 100 campuses after a wave of bankruptcy and accreditation issues, leaving over 70,000 currently-enrolled students out of class, and over 350,000 current and former students still in debt for course-work that no other college would honor. In that time, a lawsuit from the Consumer Financial Protection Bureau made their predatory student lending practices headline news. Corinthian College students had been pressured into taking out private, high-interest ‘Genesis’ loans for the company’s entire history.
In February, the CFPB announced nearly $500 million in debt relief for victims of the Genesis loans, but many students were quick to notice a gaping hole in this relief effort – students who had taken out federal and government loans to attend Corinthian weren’t eligible for aid. A debt strike began with 15 students, quickly spreading.
A new statement from the Department of Educations Secretary Arne Duncan addressed expanding that relief, but it’s still not the debt discharge that the victims are looking for. According to Duncan, “The Department is helping more students manage their [federal] student debt through flexible repayment options such as the Pay As You Earn plan (PAYE), which caps student loan payments at 10 percent of a borrower’s monthly income.”
Perhaps it’s a step in the right direction, but reading through the financial language, what it still adds up to is the federal government continuing to profit off the student loans of people whose educations were disrupted or ended by the collapse of Corinthian College. If the government saw clear to discharge $480 million in private debt, why are they continuing to hold debts owed to themselves over the same students’ heads?