After years of miseducating students nationwide, Everest College is finally toppling from its perch at the peak of the for-profit college bubble. But now thousands of alleged fraud victims are mired in a debt trap of epic proportions.
Of course, the collapse was a longtime coming, as Everest’s parent company, the disgraced for-profit college chain Corinthian, has been wrestling for months with legal charges over false advertising and financial misconduct. But although the Department of Education (DOE) has offered to discharge the debt that Corinthian students have racked up, activists say the government—that is, their lender—is failing to help defrauded students escape potentially billions in debt.
In April, the closure of Everest Institute in Rochester, New York with scant prior warning, left many students distraught. As one student, studying to be a medical asssitant, told the local paper, “Most of us here have kids. We’re struggling parents trying to make our lives better,” she said. “Now all I’ve got is a tuition bill for $9,000. How am I going to pay that?”
Technically, students should generally be eligible to have their loans discharged if they completed part of their coursework a Corinthian school within roughly the past year, before the company announced the closure and sale of dozens of remaining campuses last spring. The enrollment at the time totaled about 16,000 students (holding some $214 million in debt), down from 72,000 last year when the company’s phased shutdown began.
But Maggie Robb, an attorney with the civil legal aid group Empire Justice in Rochester, sees little in the way of Plan B for local Everest students who have streamed into her office. “The current process,” she says, “places the burden on actual students to receive the discharge application, understand the application, apply for the discharge, and understand any future decision that may come their way all on their own.” Though students of closed schools should qualify for immediate debt forgiveness, Robb adds, “Even I as a lawyer found it to be very difficult to make my way” through the process.