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Teachers Union Calls For Loan Forgiveness For Corinthian Students

The leader of the country's second-largest teachers union said the Education Department's lack of oversight and regulation contributed to the destructive effects of the school's collapse.

Posted on April 29, 2015, at 4:55 p.m. ET

Adam Rountree / Associated Press

Randi Weingarten, the president of the American Federation of Teachers, the country's second-largest teachers union, has joined a chorus of high-profile political leaders calling on the Education Department to forgive the loans of all former students of Corinthian Colleges, the collapsed for-profit college giant.

"This is an egregious situation, and attorneys general have document this for years," Weingarten told BuzzFeed News. "How much more evidence does one need for the Education Department to exercise their legal authority to discharge the debt? if you don't do that, what it is saying to other for-profits?"

In a letter released today, Weingarten blames the Education Department for mismanaging Corinthian's collapse.

"Your actions—or lack thereof—surrounding the collapse of the for-profit Corinthian Colleges chain have, in effect, pulled the rungs out of the ladder of opportunity for students," Weingarten said. "On numerous occasions, the department could have intervened."

The department has indicated that it will consider applications for a "defense against repayment" of their loans from former students at Corinthian on a case-by-case bases. Additional language it provided to BuzzFeed News suggests that it will require students to "prove injury in the amount of his or her loss," which could be a hefty process.

But Weingarten disagrees. "In cases where fraud is pervasive — like Corinthian — students should not have to make the case for loan forgiveness on an individual basis," she wrote in the letter.

While the federal government had maintained it was in the best interest of students at Corinthian to allow the schools to be sold off, enabling them to continue their education, California Attorney General Kamala Harris effectively blocked the sale of any Corinthian campuses in her state.

On Sunday, Corinthian abruptly closed the schools it could not sell, leaving 16,000 students midway through their degrees. Ten thousand of them were in California.

Weingarten said she understood Harris' decision. "She doesn't want to let a bad actor off of the hook," Weingarten said. "That's why it's incumbent on the Department of Education to discharge these students' debt."

Weingarten's letter also criticizes the Department of Education for recommending that students at shuttered Corinthian schools attend other for-profit colleges under investigation for abuses. The department had failed to adequately warn students that if they transferred they would not be able to discharge their loans, Weingarten said.

Dear Secretary Duncan:For years, we have warned Congress and the Department of Education about the dangers of for-profit colleges' predatory actions and how they are harming students. In the Corinthian Colleges collapse, students (as well as the employees of Corinthian) are suffering the consequences of ignoring these concerns.Your actions—or lack thereof—surrounding the collapse of the for-profit Corinthian Colleges chain have, in effect, pulled the rungs out of the ladder of opportunity for students. Even worse, the fleeing Corinthian Colleges executives have yanked that ladder right out from under their students, and the department's actions—no doubt inadvertently—are helping them. Secretary Duncan, you have the legal authority to discharge the loans of students who have been defrauded by their colleges or who attend schools that close. And you have the moral obligation to stand with these students by making them whole.There has never been a better case for exercising this authority. Corinthian consistently overpromised and underdelivered for students, instead continuously protecting its bottom line. The for-profit giant has been the subject of investigations for fraudulent practices by several federal agencies—including your own department—and by multiple state attorneys general for years leading up to Monday's final collapse.On numerous occasions, the department could have intervened: back in December, when you helped facilitate the sale of many Corinthian campuses to a ruthless debt collector, and just this week, when your department referred wronged students to other predatory schools under investigation. These actions have undermined students' options for financial relief and left them with no diploma, crippling debt and an uncertain future.You can still help make this right. In cases where fraud is pervasive—like at Corinthian—students should not have to make the case for loan forgiveness on an individual basis. Instead, the department should facilitate loan forgiveness for these students.I urge you to use your power to protect all Corinthian students and all other students who may find themselves in similar situations in the future.Sincerely,Randi Weingarten

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