Thousands of students who went to Corinthian Colleges and filed a lawsuit for student loan relief scored an important victory last month. The presiding judge acted to temporarily stop the U.S. Department of Education from collecting loan debts from the former students. The decision was reached because of alleged violations of the federal privacy act by the agency, USA Today reported.
Currently, a lawsuit seeks to dismiss millions in federal student loan debt for the students who attended for-profit Corinthian Colleges and didn’t get an education that would actually help them land jobs in their fields.
The judge said the decision to suspend student loan payments was justified because the students will probably win some of their legal arguments. But it was also based on the department’s reported violation of the Privacy Act by sharing borrowers’ personal information with the Social Security Administration to determine what percentage of their loans to discharge.
“Saving money does not justify a violation of the law – the Privacy Act,” the judge wrote in her ruling.
This ruling was called important by Toby Merrill, who serves as the director of the Project on Predatory Student Lending.
“The notion that students got anything other than negative value from Corinthian has been roundly disproved by student experience and the judgment of employers and the legitimate higher education sector,” he said, according to USA Today.
Corinthian was a major player in the education world, with over 100 campuses spread throughout 25 states. It brought in more than $1.7 billion in federal student aid in 2009 and 2010. In 2015, Corinthian Colleges ceased to exist, shutting down all its campuses.
Corinthian shut down because the Department of Education determined the colleges weren’t truthful about the job hiring levels its graduates were able to obtain. With that determination, the federal government stopped Corinthian’s federal student loan inflow, which cut off much of the school’s funding.
Once many Corinthian students realized they would be unable to find employment in their field, they sought relief from the Department of Education. Approximately 25,000 Corinthian students were given full loan discharges when Obama was president.
But when Trump became president, the loan forgiveness plan was revamped. According to the new administration, only six Corinthian schools were found to have not met guidelines while 51 were found acceptable. Relief was scaled back accordingly with a new method that calculated any potential relief based on whether the students found jobs earning as much as their peers in those programs.
According to the Trump administration Education Secretary Betsy DeVos, those changes would allow for quick handling of the requests for relief and for students who were truly harmed to get relief.
“It also protects taxpayers from being forced to shoulder massive costs that may be unjustified,” DeVos said, according to USA Today.
After that decision, thousands of Corinthian students who had already sought loan discharges filed a class-action lawsuit in March.
The judge’s recent ruling lands in favor of the students filing the lawsuit – for now. But there was some bad news for the students who filed the lawsuit, too. The judge said if the Department of Education follows proper procedure, DeVos may make the call on whether she cancels all of the students’ debts.
Author: Mike Brown
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