Education

For-Profit College Closure Could Cost Taxpayers Hundreds Of Millions

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Blake Neff Reporter

More than 16,000 students across the country have found their college educations abruptly ended after for-profit chain Corinthian Colleges abruptly ceased all operations at its 28 remaining campuses over the weekend. The announcement could end up costing U.S. taxpayers millions.

Corinthian’s closure isn’t a huge surprise, as it had been winding down its operations for nearly a year, since the federal government cut it off from federal student loans after accusing it of falsifying its job placement numbers.

However, the shutdown still arrived with almost no warning for the company’s students and employees, and several campuses had continued to enroll new students throughout the chain’s collapse, as the company was attempting to sell off its remaining campuses. Some students appear to have been unaware of just how precarious Corinthian’s position was. Dylan Low, a student at Everest College-Ontario who was three classes away from completing an associate degree in criminal justice, told the Los Angeles Times that “a lot of us are devastated” by the closure.

Now, those students are out of luck. Corinthian said it would try to offer continuing education opportunities for students whose classes have abruptly ended, but acknowledged that those plans  “depend to a great degree on cooperation with partnering institutions and regulatory authorities.”

Corinthian’s collapse could affect far more than the chain’s students, however. Its thousands of students took out hundreds of millions of dollars in government student loans to attend, and many of those students are now stuck with lots of debt and no degree or a relatively low-value one. While students whose schools shut down are among the handful of people who can have their student loans discharged, they cannot do so if they have they attempt to transfer their credits to another institution.

Some activists and lawmakers are calling for the debt taken out by Corinthian students to be more easily discharged. In addition, more than 100 former Corinthian students have launched a “debt strike,” refusing to repay their loans on the grounds that Corinthian engaged in predatory practices. Sunday’s collapse added renewed vigor to those demands.

“Finally, we see the end of this rotten company, but there are still thousands of students who may never see the end of the damage Corinthian has caused if the Department of Education doesn’t move quickly to provide some relief,” Illinois Sen. Dick Durbin said in a statement Sunday.  “I am calling on the Department of Education to reach out directly to students impacted by the Corinthian closings and provide them with information on how they can receive a discharge of their federal student loans.  These students shouldn’t be on the hook for the debt they were misled into taking on.”

Just a week ago, Secretary of Education Arne Duncan said that expanded forgiveness for students at Corinthian and other for-profit schools was “on the table.” The Department of Education has already forgiven $480 million in private loans made to Corinthian students.

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Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.