Last year, for-profit college ITT closed its doors and entered bankruptcy proceedings. This was a stunning fall for a massive, nation-wide college that seemed too big to fail. Earlier this year, a group of former students intervened in ITT’s federal bankruptcy proceedings in an attempt to give a face to the “hundreds of thousands” of students that ITT “defrauded” over the years. In their intervention, they provided the stunning testimonials of former students and employees who had endured and witnessed years of misconduct. Among the misconduct was ITT’s cavalier and sometimes predatory efforts to induce prospective students into taking out massive student loans to attend ITT. Here are some of their statements: A student (number 8011) who attended ITT in Alabama wrote: “When I started I was told that my payments would be $50 a month for my private and federal loans, My private loans were closer to $500 and my federal $200 a month.…Read More
Were you ripped off by Corinthian College? Were you promised a great education and better job prospects, yet left with nothing but a massive student loan when the college shut down and went into bankruptcy? Unfortunately, you are just one of tens of thousands of students who was defrauded by the for-profit college. But in some rare positive news, you may be entitled to some relief in the form of student loan forgiveness. Corinthian College Found Liable For Defrauding Students In March 2016, Corinthian College, which operated Everest College, Heald College, and Wyotech in California, was found liable for defrauding its students. In the $1.1 billion judgment, the college was found to have: Provided false job placement statistics in its advertising. Advertised degrees and programs that it did not even offer. Engaged in unlawful student loan practices. Misrepresented whether Corinthian College credits were recognized by other colleges. The California Attorney General at the time, Kamala…Read More
Federal Student Aid (FSA) is a governmental entity under the Department of Education that administers contracts and oversees companies that offer students loans to college students. When Obama was president, he had concerns that too many students were defaulting on their loans and the quality of service that collections agencies were providing to students. As a result, he authored three memos to FSA that required agencies to: Improve outreach efforts to students at risk of defaulting on their loans; Create a minimum standard of service that agencies have to provide to students; and Consider the possibility that agencies who provide poor service to students are penalized for providing poor service. That doesn’t sound too cumbersome, right? To require that collection agencies follow a minimum standard of service so that students have options before they default? After all, these agencies are more than happy to offer students ill-advised loans. The Trump administration apparently disagreed. On April…Read More
