Warren: Education Dept. Failing Corinthian Students

September 30, 2016

Senator Elizabeth Warren sent a scathing letter to Education Secretary John King Jr. Thursday saying that his department is failing to provide promised relief to thousands of former students who attended campuses of Corinthian Colleges, the for-profit chain that closed its doors in 2015. Instead, she said that the department's student loan arm continues to collect on debt that may be eligible for discharge and in some cases even to garnish student borrowers' wages.

"Instead of adding insult to injury for tens of thousands of Corinthian victims by pushing scores of them into debt collection, the Department of Education should stand up for these students as it promised to do for more than a year and immediately halt all collections on this debt," Warren said in the letter.

According to Warren's letter, new data analyzed as part of an investigation by her staff showed:

  • Nearly 80,000 former Corinthian students are eligible to apply for debt relief but are in some form of debt collection by the department
  • More than 30,000 student borrowers are in administrative offset -- subject to having tax refunds or other benefits like Social Security seized to pay off student loan debts.
  • More than 4,000 borrowers are having wages garnished by the government.
  • Fewer than 4,000 former students have received relief through borrower defense discharge, while more than 23,000 former Corinthian students have filed borrower defense discharge applications with the department.

Warren wrote that the department promised last year to fast-track relief for students without requiring individuals to show they were affected by fraud at Corinthian.

But in a press briefing at the White House Thursday, King said not all of the 80,000 students mentioned in the letter would qualify for debt relief. "Folks are in different situations. Some are eligible if they seek to apply for closed school discharge or borrower defense. Others would not be," he said. "We're going to keep making sure that borrowers know what their options are."

King said there were findings of fraud at some Corinthian programs and not others. The department believes that part of what is required for the debt relief process is for students to attest that they defrauded by an institution, he said.

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