On Monday, the Department of Education made a grand gesture of forgiveness, offering relief to the former students of the scandalized for-profit college chain Corinthian.
The notorious franchise—widely condemned as a predatory diploma mill that bilked both the government and hundreds of thousands of students—recently filed for bankruptcy, amidst charges of massive fraud. As public outcry mounts, Education Secretary Arne Duncan announced that the administration would create a “durable” process for fraud victims to apply for federal loan relief.
Presenting the Education Department as a champion of former Corinthian students and others cheated by for-profit schools, Duncan promised to “make this process as easy as possible for them, including by considering claims in groups wherever possible, and hold institutions accountable.”
The key word was “possible.” To embattled anti-debt activists, the measure smacked of political trickery by the federal authorities that had long failed to regulate for-profit schools like Corinthian. The Debt Collective, an Occupy-inspired campaign against the student-debt system, seeks immediate relief for all Corinthian students. The process of requiring students to file individual claims, they argue, merely deflects public attention from the Corinthian’s crimes and the $1.2 trillion education-debt crisis that the company symbolizes.
“I think it’s a bunch of BS if you really want to know the truth,” says Latonya Suggs, a 27 year-old former student of Corinthian’s Everest College, now an activist with the Debt Collective’s strike campaign. “They know that we are more powerful in numbers so the only way to try to back us down and break us down is to do an individualized process. They know that there are thousands of students that can’t even afford lawyers, and they can’t afford to gather this kind of evidence to prove the situation that’s going on. So now they just leave us in a limbo.”
Duncan’s plan claims to offer a streamlined process for dealing with borrowers’ petitions for relief, but it falls well short of the total discharge of debt that activists have been seeking—and have instructively outlined for Duncan in a model draft order. The Department of Education is also making special provisions to provide loan forgiveness to former students of one Corinthian branch, Heald College, which recently got slapped with $30 million in fines over false marketing of job placement rates.