Warren: Feds go after ex-students

Sen. Elizabeth Warren accused the Education Department on Thursday of moving forward with debt collection against nearly 80,000 former students of Corinthian Colleges, despite federal and state findings that the now-defunct for-profit chain defrauded students.

The Massachusetts Democrat sent a letter to Education Secretary John B. King Jr. reporting the findings of an investigation by members of her staff. “It is unconscionable that instead of helping these borrowers, vast numbers of Corinthian victims are currently being hounded by the department’s debt collectors,” she said.

In response, King said, “Some of those students attended programs where there were findings of fraud. Others did not.”

King said the department would keep making sure Corinthian borrowers know what their options are for student loan forgiveness. He was asked about Warren’s letter during a briefing with reporters after a meeting at the White House with President Obama to discuss efforts to make college more affordable.

In her letter, Warren asked the department to immediately halt all collections on Corinthian students’ debt and discharge their federal loans.

Warren said the debt collection has resulted in “many having their credit slammed, their tax refunds seized, their Social Security and earned income tax credit payments reduced, or their wages garnished — all to pay fraudulent debts that are likely eligible for discharge.”

Her staff’s investigation found that about 30,000 Corinthian borrowers are having their tax refunds, tax credits or other government benefits like Social Security seized to pay off their debts. Wages are being garnished for more than 4,000 of these borrowers, the letter said.

Corinthian Colleges, one of the largest chains of forprofit colleges, filed for bankruptcy protection last year, closing schools and leaving thousands of students with frustrated efforts to earn degrees and mountains of financial debt.