Representative Takano Submits Public Comments Calling for Debt Relief for Corinthian College Students

Washington, DC – Earlier today, Representative Mark Takano submitted public comments encouraging the Department of Education to allow greater access to debt relief for former students at for-profit institutions run by Corinthian Colleges, Inc. The collapse of Corinthian has highlighted concerns that the Congressman has long held about the for-profit higher education system.

In his comments, Takano encourages the Department of Education “to issue regulations that include a class-wide automatic student loan discharge for Corinthian borrowers” because “it is long past time that defrauded students have a clear and accessible path to relief.”

Full text of letter:

The Honorable Arne Duncan
Secretary of Education
U.S. Department of Education
400 Maryland Avenue, SW
Washington, DC 20202

Re: Negotiated Rulemaking Committee; Public Hearings (Docket ID number ED-2015-OPE-0103)

Dear Secretary Duncan:

The collapse of Corinthian Colleges, Inc. has demonstrated the critical need for comprehensive defense against repayment regulations that provide a clear process for debt relief for defrauded students. More than a year after the Department of Education (ED) expressed concerns about Corinthian’s practices, including falsifying job placement data and allegations of altered grades, it is long past time that defrauded students have a clear and accessible pathway to relief.

I encourage ED and the negotiating committee to issue regulations that include a class-wide automatic student loan discharge for Corinthian borrowers. While I commend ED for issuing an automatic discharge for Heald College students, I believe it is clear that the deceptive practices cited in the Heald discharge are pervasive in the larger Corinthian system, and all Corinthian students should qualify. In the future, ED should work quickly to identify and issue automatic group discharges where evidence of wrongdoing warrants it.

The regulations also should eliminate current barriers to relief and mitigate any unintended consequences of the debt relief process. Current barriers include the attestation form requirement, the restriction on relief to direct loan recipients only, the complexity of the defense against repayment application, and the inability of borrowers to update their applications. Potential unintended consequences for borrowers seeking relief include the interest that continues to accrue when ED automatically places loans in administrative forbearance, possible tax consequences of loan discharge, and the potential for federal regulations to preempt stronger state laws. I ask ED and the negotiating committee to carefully consider these issues as you develop regulations.

Defrauded borrowers must have a clear and comprehensive path to relief. I urge your swift and thorough action in issuing regulations that will help current Corinthian students and future defrauded borrowers alike.

Sincerely,

Mark Takano
Member of Congress