For Immediate Release - November 30, 2015

AG Healey Submits Application to U.S. Department of Education to Cancel Thousands of Loans for Former Corinthian Students

BOSTON – Attorney General Maura Healey today submitted an application to the U. S. Department of Education requesting the immediate cancellation of loans taken out by former students of Corinthian Colleges in Massachusetts who were victimized by the for-profit school’s illegal conduct. 

The 2,700-page submission, complete with investigatory findings, supporting evidence, and compiled attestations from former Corinthian students, was sent today to Secretary of Education Arne Duncan and Special Master Joseph Smith, who is charged with reviewing the debts of students who attended Corinthian schools and establishing state law discharge procedures. The application asks for a group discharge of all federal loans taken out by approximately 7,200 student borrowers who attended Corinthian’s Everest Institute campuses in Brighton and Chelsea between 2007 and when Corinthian closed its Everest campus operations over the last two years.

“Our students are entitled to this relief today,” AG Healey said. “This submission makes clear that Corinthian repeatedly violated our state laws by failing to provide the education, services, and career opportunities promised to students. I urge the Department to use its authority to help these students get out from under these mounting debts and move on with their lives.”

According to the AG’s Office, students who took out federal student loans to attend these predatory programs are legally entitled to immediate forgiveness under federal law, Department rules, and the terms of the loan contracts each student signed. The Department has already used its existing authority to grant discharges to defrauded students, including students at Corinthian’s Everest campuses in California, and Heald campuses in California, Hawaii, and Oregon, on the basis of its illegal conduct. 

“Corinthian’s egregious deception and mistreatment of Massachusetts students is likewise unlawful and our students are equally deserving of relief,” today’s letter to the Department stated.

Throughout the course of its investigation into Corinthian, the AG’s Office has received communications from nearly 1,000 Everest students and found widespread misrepresentations regarding job placement rates, including claims by admissions representatives that prospective students were “guaranteed employment” and that programs had job placement rates of “70%,” “95%,” and even “100%,” while the actual rates were much lower. Students also found that there was little or no career placement assistance provided.

The AG’s application also details deception by Corinthian, as alleged in a lawsuit against Corinthian brought by the AG’s Office in April 2014, including Corinthian’s false statements regarding the earnings of graduates in Massachusetts, the nature and quality of the instruction, the availability of externships, and transferability of credits from Corinthian’s Massachusetts locations.

In September, the AG’s Office hosted an event – attended by Department of Education officials – to help Corinthian students receive individualized assistance in enrolling in more affordable repayment plans and applying for cancellation of their federal school loans. Together with U.S. Senator Elizabeth Warren, AG Healey called on the Department to help students in Massachusetts get rid of the unsustainable loan payments incurred by attending the now-defunct for-profit school. Included in today’s application are intakes from Everest Institute students who came to the event to apply for discharges.

AG Healey continues to lead efforts to help students who were deceived by predatory for-profit schools. This year she has rallied state attorneys general and members of Congress to speak out on the importance of loan discharge, authored letters, and organized calls and meetings with the Department of Education to help students struggling with their federal loan debt.

In April, AG Healey, along with attorneys general in eight states, sent a letter to the Department of Education calling on them to take swift action to protect students victimized by for-profit schools. In August 2015, AG Healey led a second multistate effort with attorneys general in 11 states, later joined by two others, calling on the Department to provide clear procedures to help students apply for loan discharges. 

For more information on AG Healey’s extensive consumer protection campaign and comprehensive and ongoing investigation into the for-profit education industry, click here.

Student borrowers who are interested in learning more about income-based repayment programs, who have questions about their options, or who would like assistance with managing their student loans, should visit the Student Lending Assistance page or call the Attorney General’s Student Loan Assistance Unit Hotline at 1-888-830-6277.

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