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U.S. Department of Education officials have determined that a slew of additional campuses owned by Corinthian Colleges misrepresented job placement rates, a finding that could help some 85,000 former students have their federal loans canceled.
The department announced Tuesday that hundreds of programs at the now-defunct for-profit chain's Everest and WyoTech campuses in California misled students about their job prospects after graduation. Officials also said they found misrepresentation at Everest University online programs based in Florida.
The announcement is essentially an expansion of the scope of the department's April findings against Corinthian-owned Heald College. At that time, the department slapped Heald with a $30 million fine, which sank Corinthian's efforts to sell off those campuses and helped push the struggling company into bankruptcy several weeks later.
The new findings by the Education Department mean little for Corinthian as a company, which was dissolved in bankruptcy in August. But they are significant for former Corinthian students who seek to have their loans canceled.
The department’s determination means that an additional 85,000 former students “will now be immediately eligible for relief under the borrower defense to repayment law,” Under Secretary of Education Ted Mitchell told reporters Tuesday.
Borrowers will still have to fill out paperwork to receive the benefit. Among other things, the borrowers must attest that they relied on the company’s exaggerated job placement rates in making their decision to take out a federal loan.
The department earlier this year said it would “expedite” debt relief applications for about 40,000 former Heald students because officials already had enough evidence to process their claims.
With Tuesday's findings, the department said, an additional 85,000 students at the affected WyoTech and Everest campuses will be eligible to have their loans canceled under that expedited process.
Mitchell said the department has received 6,400 debt relief claims under the borrower-defense-to-repayment provisions. Although he said the department has made “significant progress in reviewing them,” it has yet to grant any of those claims, including those deemed “expedited.”
Separately, Mitchell said Tuesday that the department has wiped out $70 million in federal loans of former Corinthian students who applied to have their loans discharged under the closed-school provision. He said the department approved 5,300 of the 10,100 requests for closed-school discharges relating to Corinthian. Borrowers were eligible for that type of relief if they were at shuttered Corinthian campuses -- or had recently withdrawn from one -- and were unable to continue their education elsewhere.
The department described its findings as the product of a joint investigation with California Attorney General Kamala Harris, whose office sued Corinthian more than two years ago, alleging misrepresentation of job placement rates, among other wrongdoing.
Harris said in a statement that the “findings will expand the pool of Corinthian students eligible for streamlined student loan relief options.” She thanked the department for “joining” her office “to keep Corinthian accountable for their actions and providing debt relief to students who were misled.”
On a call with reporters Tuesday, Harris said that Corinthian recruited “isolated, impatient people with low self-esteem and few people in their lives who care about them, and who are stuck and unable to see and plan well for their future.”
She said the students who enrolled at the company deserved the “chance to free themselves of loan obligations.”
Education Secretary Arne Duncan said in a statement that the “results of our joint investigation will allow us to get relief to more students, more efficiently.”
Here is a list of the affected Everest and WyoTech programs at California campuses. Here is a list of affected programs at Everest University's Florida-based online programs. Both lists include the programs' stated job placement rates and what the Education Department now says are the correct rates.
