U.S. to wipe out more Corinthian Colleges student debt

[Little Tich]

Source: Yahoo! News / Reuters

WASHINGTON (Reuters) - The U.S. Department of Education said on Monday it was moving to forgive much of the federal student debt of some of the 78,000 students who had attended the now-bankrupt Corinthian Colleges.

It will let students who left the schools run by the major for-profit chain on or after June 20 last year receive a closed-school discharge of their federal student loans. This is instead of the usual period of 120 days up until it closed its last campuses on April 26, effectively adding about six months to the eligibility period.

Santa Ana, California-based Corinthian, which had operated the Heald College, Everest and WyoTech schools and offered degrees in healthcare and trades, filed for bankruptcy on May 4. It entered Chapter 11 with $143 million in debt and about $19 million in assets, according to Delaware bankruptcy court documents.

Late last year, Corinthian sold off more than half its campuses to non-profit education provider ECMC Group Inc. Thirteen campuses, included Everest and WyoTech in California, remained open up to the April 26 announcement.

Read more: http://news.yahoo.com/u-wipe-more-corinthian-colleges-student-debt-234840715--finance.html

[Raine1967]

1. Excellent news. For some background:

http://www.huffingtonpost.com/2015/03/30/corinthian-100-debt-strike_n_6970284.html

The borrowers, who collectively owe the department and their private lenders some $3.3 million, launched their “debt strike” in February to force the Education Department to forgive federal student loans taken out by tens of thousands of Americans to attend Corinthian’s schools. The strike was prompted by the department’s handling of Corinthian, a crumbling operator of for-profit schools such as Everest, Heald and Wyotech.

Last year, the troubled company was forced to sell more than 50 campuses and shutter others under a deal brokered by the Education Department that followed lawsuits by numerous state and federal authorities alleging the company had defrauded students for years with fake job prospects and false graduation rates.

While the new owners of the campuses got the schools at a discount and Corinthian shed huge amounts of liability, former students who claim they were swindled into taking out federal loans to attend classes are stuck with their debts.

And this: https://debtcollective.org/studentstrike read the stories, they are right to strike.

[PSPS]

2. They should claw back the stolen funds instead of making the taxpayer bail them out.

But, of course, if they did that, it would reduce the vigorish "campaign contributions."

[Gregorian]

3. I'm wondering if this could work in other areas, like banks.

It just sounds like a story where something horrible was allowed to die, like in Iceland.

[Sparhawk60]

4. Occupy Is Doing Good Work

One of the great things Occupy is doing is buying up defaulted student loan debt (often for pennies on the dollar) and then cancelling the debt. I think it is a ingenious way for normal folks to help fix a major social injustice.