December 21, 2017 from Highland Community News:
SACRAMENTO – California Attorney General Xavier Becerra issued the following statement on the news that Education Secretary Betsy DeVos has decided to provide only partial relief on federal student loans to defrauded Corinthian students:
“Under federal law, Secretary DeVos is required to provide full – not partial – relief to Corinthian students. The California Department of Justice will continue to hold her accountable through our ongoing lawsuit. Corinthian students had their American Dream stolen by a so-called higher education institution. This Department of Education needs to carry out its legal duty and help them rebuild their lives.”
Background: In 2013, the California Attorney General’s Office led the charge against for-profit Corinthian Colleges and its subsidiaries, seeking to put an end to abusive practices that left students under a mountain of debt and far too often without the jobs Corinthian had falsely promised its degrees would provide. Corinthian specifically targeted low-income, vulnerable students through false advertisements that misrepresented job placement rates and the value of its educational programs. Corinthian illegally used the seals of the armed forces in its advertisements to recruit veterans. It also engaged in illegal debt collection practices. The California Attorney General’s Office ultimately obtained a $1.1 billion judgment against Corinthian for its misconduct and the permanent closure of all Corinthian schools in California.
The California Attorney General’s Office was instrumental in moving the Department of Education to implement a borrower-defense process to grant widespread, expedited loan relief to defrauded Corinthian borrowers. Based on a joint investigation with the California Department of Justice, the Department of Education under President Obama announced that tens of thousands of former Corinthian students were entitled to federal student loan relief. The Department announced a streamlined process by which former Corinthian students could apply for that relief.
On December 14, Attorney General Becerra took Secretary DeVos to court for withholding student loan debt relief for Corinthian students. The federal Higher Education Act entitles student loan borrowers to relief if they are defrauded by their schools. More than 50,000 such claims submitted by Corinthian students are pending before the Department of Education, 13,000 from Californians. Today, the Harvard Law School Legal Services Center Predatory Lending Clinic and Housing and Economic Rights Advocates joined Attorney General Becerra’s lawsuit.
December 20, 2017, Oakland, California:
This morning, borrowers represented by HERA and the Project on Predatory Student Lending at the Legal Services Center of Harvard Law School filed a nation-wide class action against the Department of Education for illegally and unfairly denying relief to tens of thousands of former Corinthian students who the Department already decided are entitled to have their loans discharged and their payments refunded. Not only were they lied to by Corinthian, they have now been lied to by the federal government.
The case was brought by three named plaintiffs:
- Martin Calvillo Manriquez was talked into WyoTech’s automotive technology program over community college. He didn’t really have an opportunity to even touch cars or car parts while he was enrolled. The school didn’t have tools or certified instructors. While he was in school, he worked at an oil change shop earning $8 an hour. He kept seeing classmates who had graduated from his program applying for the same low-paying, non-technical job he already had. Most of them didn’t even get jobs changing oil. Martin has never had a job related to auto repair. Even though the Department determined that Martin was misled and cheated, and even though he applied to have his loans discharged, the Department has taken two years of tax refunds and garnished his wages to pay back his loans.
- Rthwan Dobashi owes more than $20,000 for the same program. He has also never worked in the field. He is married, has two kids, and is expecting a third. In early 2016, he found out from the attorney general that he was eligible to have his debts from WyoTech cancelled, and he applied. He also told one of his friends from school, and his friend applied, too. His friend’s loans were discharged almost a year ago, while Rick still hasn’t heard anything from the Department.
- Jamal Cornelius’s attended the Information Technology-Emphasis in Network Security program at Heald College, and borrowed more than $25,000. His debt from Corinthian is the only line on his credit report. He has been waiting more than fourteen months for any response to his application for relief.
All three borrowers, and all class members, are entitled to relief pursuant to the Department’s Corinthian Job Placement Rate Rule, which it has established through countless public statements, previous discharges, and direct notice to tens of thousands of covered individuals. The Department may not now change this rule and apply changes retroactively. In other words, it is unlawful for the Department to go back on its word.
See the full complaint here.
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