Attorney General Becerra Issues Statement on Department of Education’s Illegal Decision to Provide Only Partial Loan Debt Relief to Corinthian Students

SACRAMENTO – California Attorney General Xavier Becerra issued the following statement on the news that Education Secretary Betsy DeVos has decided to provide only partial relief on federal student loans to defrauded Corinthian students:

“Under federal law, Secretary DeVos is required to provide full – not partial – relief to Corinthian students. The California Department of Justice will continue to hold her accountable through our ongoing lawsuit. Corinthian students had their American Dream stolen by a so-called higher education institution. This Department of Education needs to carry out its legal duty and help them rebuild their lives.”

Background

In 2013, the California Attorney General’s Office led the charge against for-profit Corinthian Colleges and its subsidiaries, seeking to put an end to abusive practices that left students under a mountain of debt and far too often without the jobs Corinthian had falsely promised its degrees would provide. Corinthian specifically targeted low-income, vulnerable students through false advertisements that misrepresented job placement rates and the value of its educational programs. Corinthian illegally used the seals of the armed forces in its advertisements to recruit veterans. It also engaged in illegal debt collection practices. The California Attorney General's Office ultimately obtained a $1.1 billion judgment against Corinthian for its misconduct and the permanent closure of all Corinthian schools in California.

The California Attorney General's Office was instrumental in moving the Department of Education to implement a borrower-defense process to grant widespread, expedited loan relief to defrauded Corinthian borrowers. Based on a joint investigation with the California Department of Justice, the Department of Education under President Obama announced that tens of thousands of former Corinthian students were entitled to federal student loan relief. The Department announced a streamlined process by which former Corinthian students could apply for that relief.  

On December 14, Attorney General Becerra took Secretary DeVos to court for withholding student loan debt relief for Corinthian students. The federal Higher Education Act entitles student loan borrowers to relief if they are defrauded by their schools. More than 50,000 such claims submitted by Corinthian students are pending before the Department of Education, 13,000 from Californians. Today, the Harvard Law School Legal Services Center Predatory Lending Clinic and Housing and Economic Rights Advocates joined Attorney General Becerra's lawsuit.