SAN FRANCISCO (Legal Newsline) — California Attorney General Kamala D. Harris issued a statement urging the U.S. Department of Education to better help students allegedly defrauded by Corinthian Colleges and other for-profit colleges.
“Too many students defrauded by for-profit colleges remain buried under mountains of student debt,” Harris said. “I call on the Department of Education to revise their proposed regulations to ensure meaningful debt relief is available to any student misled by a predatory college."
Harris’ office believes that the recently collapsed Corinthian defrauded students by widely misrepresenting job placement rates. The state alleges that this is an issue not limited to Corinthian, as many for-profit institutions use dishonest tactics.
Current federal law allows for students to seek to have loans discharged when a school has acted unlawfully, but does not provide clear guidance on who may be eligible. With the rise in allegations against for-profit institutions, the U.S. Department of Education set about developing a “negotiated rule-making process” and convened a committee to voice opinions on the process. The committee included state attorneys general, students, student advocacy groups, public schools, for-profit schools and accreditors.
After discussion, the department unveiled a new proposed process that Harris’ office believes is not enough. Her office claims the proposal unreasonably limits the categories of misconduct that would allow debt relief, unfairly puts a two-year statute of limitations on borrowers seeking repayment and does not provide any procedure that grants broad, automatic relief to borrowers.