Obama to Cancel Millions in Student Loans Swindled by Rubio-Supported Corinthian Colleges
Corinthian College Inc. is the bankrupted and criminal organization that Marco Rubio was defending just this past year, probably because he got a boatload of money from them in campaign organizations. Over the past 10 years it has come to light—through numerous lawsuits and state and federal investigations—that untold billions of dollars has been swindled out of student and taxpayers’ pockets by this private educational company. Earlier this year the Obama administration forgave almost half a billion dollars in federal student loans that were fraudulently acquired and today it’s being reported that further cancelations of federal student loans are coming.
The move marks the first recent use of a little-utilized provision in federal law that gives student debtors the right to petition the Education Department to discharge their debt in cases where they were defrauded into taking out loans.
The debt forgiveness plan only affects 1 percent of the roughly 125,000 student debtors who are eligible for expedited debt cancellation. That comes to about 2 percent of the students' nearly $1.3 billion in combined loan balances. The department said in June and November that those borrowers were eligible for immediate loan relief after determining that Corinthian had likely defrauded the former students by advertising false job placement rates.
The move is symbolic at best right now. As the Huffington Post points out, Massachusetts is being pressured to do six times that number in their state alone.
The department had received fewer than 6,700 applications as of Nov. 18, according to its report. By comparison, Massachusetts Attorney General Maura Healey on Nov. 30 urged Duncan to cancel debts owed by about 7,200 borrowers who attended Corinthian’s schools in her state alone. She sent the department 2,700 pages of confidential evidence from her investigation into Corinthian’s alleged frauds and attestations from former Corinthian students to support their claims for relief.
“The department funneled billions of dollars to executives and shareholders of these fraudulent ‘schools’ for over a decade," said the Debt Collective, a group of activists who have helped organize hundreds of allegedly defrauded student debtors to stop making payments on their loans, in a statement. "It now wants to save face by creating a Rube Goldberg-type contraption to prevent as many people as possible from seeking the relief they deserve."
The criticisms of the administration are far from unwarranted as just last month another private educational organization, Educational Management Corporation, settled with the Justice Department for a reported $95.5 million dollars—a far cry from the billions they ripped off. Still, as slowly and inefficiently as things are running, they are running in a correct general direction. There needs to be better outreach to the eligible borrowers concerning their debt relief.