Newsflash: Department of Education Propaganda is Propaganda

Alarms have been sounding about Corinthian Colleges, Inc., the parent company of Everest, Heald, and Wyotech, for nearly a decade. The Department of Education could have closed Corinthian and provided victimized students with full refunds of their student loans years ago. Instead, it has coddled the embattled corporation with emergency cash inflows and facilitated sales of distressed assets while continuing to collect from defrauded students.

When the Corinthian 100 expressed their disgust with the Department by going on strike and submitting hundreds of “Defense to Repayment” claims for debt relief, the Department announced it would consider their demands. Today, it gestured in that direction by taking action against Heald College. But a $30 million fine does not address students’ demands and is little more than a slap on the wrist for a company that took in over $1 billion per year in federal student loan money. Any Department suggestion to the contrary is merely mendacious spin.

Why is there no relief for students? Why is the Department limiting this enforcement action to Heald? Why are current Heald students being forced to complete degrees at a sham institution instead of being offered “closed school” discharges of their loans?

If, as the Department suggests in its April 14th statement, Corinthian schools are guilty of “substantial misrepresentations,” then all campuses should be shut down and all current and former students should be granted full debt discharges immediately.

When the Department announces enforcement actions against predatory institutions without explaining the mechanism it plans to use to provide broad relief to borrowers, we question its real motives. To date, the Debt Collective, a group of volunteers, has done more to help students apply for defense to repayment than a federal agency with a $77.4 billion budget. The striking students of the Corinthian 100 are currently risking wage and tax return garnishment as well as a lower credit score to draw attention to their plight. Yet the Department refuses to use its authority to do what’s right.

We are still waiting on the Department’s response to our April 9th letter letter requesting a date for a follow-up meeting to further discuss students’ demands. Meanwhile, we encourage all Heald students to join the Corinthian 100 and apply for a full discharge of their student loans.