Student loans forgiven, but failed college should pay
By Michelle Leder / Bloomberg Opinion
In terms of a return on investment, it’s hard to imagine a worse outcome than the deal that American taxpayers got from Corinthian Colleges Inc., the for-profit college that closed and filed for bankruptcy in 2015.
Last week, the government agreed to erase $5.8 billion in debt owed by more than 500,000 former students who had borrowed money to attend classes at Corinthian’s campuses. The hefty number represents all remaining debt racked up by students dating back to 1995, when the company was founded. That’s on top of another $171 million in debt relief for Corinthian students announced in 2016.
On the other side of the ledger, the Securities and Exchange Commission levied a total of $100,000 in fines in 2019 to Corinthian’s former Chairman and Chief Executive Officer Jack Massimino and its former Chief Financial Officer Robert Owen for a “failure to disclose material risks related to the company’s primary source of revenue.” More specifically, Corinthian used “questionable accounting” to access federal education funds from the Department of Education that it wouldn’t otherwise be allowed to obtain. That’s not exactly an even deal.
While it’s clear that Corinthian’s aggressive business tactics, as first documented by then-California Attorney General Kamala Harris nearly a decade ago, left thousands of its former students holding the bag, it’s a bit of a mystery as to why the government hasn’t gone after the company’s former executives and directors for more money.
https://www.heraldnet.com/opinion/comment-student-loans-forgiven-but-failed-college-should-pay/
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