Mon­i­tor named for Corinthian stu­dent debt re­lief

Los Angeles Times - - COMPANY TOWN - By Chris Kirkham chris.kirkham@latimes.com

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.

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