Monitor named for Corinthian student debt relief
The U. S. Education Department on Thursday appointed an advisor to help guide the debt relief process for potentially hundreds of thousands of students who attended now- defunct Corinthian Colleges Inc.’ s campuses.
This month the department announced an expanded debt forgiveness plan for students who attended schools owned by Corinthian, which f iled for bankruptcy protection in May. The Santa Ana forprofit college operator had been on a downward spiral since last year, when the Education Department began an investigation into job placement rates.
On Thursday the department appointed Joseph A. Smith Jr. as special master to help set up the claims process for former students. Smith oversees the $ 25- billion national mortgage settlement involving f lawed foreclosures and the $ 13- billion settlement between the U. S. Justice Department and JPMorgan Chase & Co.
Smith said there are many similarities between homeowners caught up in the foreclosure crisis and students who attended Corinthian’s schools.
“You have a particularly heavy impact on low- and moderate- income people and communities of color,” Smith said in a call with reporters Thursday. He said the goal is to “handle these matters in a way that is humane, respectful of the borrowers and fair to everyone.”
In July, Corinthian an- nounced plans to sell off or close the vast majority of its Everest College, Heald College and Wyotech campuses across the country. In April the company suddenly closed more than two dozen of its remaining campuses.
Until the department announced its expanded loan forgiveness plan this month, only 16,000 students who were attending shuttered campuses had a clear path to debt forgiveness. The new policy will allow other students to apply for loan relief if they believe they were victims of fraudulent marketing and recruiting practices.
The vast majority of students who attended Corinthian’s Heald College schools since 2010 would also be eligible for federal loan discharges because of a Education Department investigation that found misleading job- placement numbers.
Undersecretary of Education Ted Mitchell said Smith will help the department develop a simple application process for all borrowers seeking loan forgiveness and help devise a broader system for students at other schools who believe they were defrauded. “We want to ensure that students receive every penny of relief they are entitled to under the law,” he said.
Since 2010, Corinthian enrolled nearly 350,000 students who took out about $ 3.5 billion in federal loans.
Former Corinthian students can f ind out more information at studentaid. gov/ corinthian or by calling ( 855) 279- 6207.