Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

FOR IMMEDIATE RELEASE: 
Jun 5 2017

About 5,700 Washingtonians should have their loans canceled

OLYMPIA — Attorney General Bob Ferguson is demanding that the U.S. Department of Education end extended delays in its program to cancel federal student loans for thousands of Washingtonians victimized by predatory for-profit colleges.

Former Corinthian Colleges, Inc. students are experiencing delays in review and approval of their loan cancellation applications. About 27,000 students nationwide who have already been approved for loan forgiveness have yet to see their loans discharged. Some students are nearing the end of 12-month forbearances on their loans, and face restarting monthly payments on debts that should be canceled.

“The Department of Education has already decided that these borrowers deserve to have their loans canceled. The delays are unacceptable,” Ferguson said. “These students were deceived, and we owe it to them to relieve them of their financial burden as soon as possible.”

In a June 5 letter to U.S. Secretary of Education Betsy DeVos, Ferguson urges the Department of Education to review the mounting applications and work to timely finalize the discharge of loans where forgiveness has already been approved. Ferguson co-wrote the letter with Illinois Attorney General Lisa Madigan and Massachusetts Attorney General Maura Healey. The letter was signed by 15 other state attorneys general and the attorney general of Washington, D.C., as well as the executive director of Hawaii’s Office of Consumer Protection.

The letter presses DeVos to provide information on what the department is doing to rectify the growing backlog of applications, and to provide a timeframe for discharge of the student debt. In addition, since the Department of Education has already determined that these students are eligible for loan forgiveness, the letter urges DeVos to abandon the application process and automatically discharge all eligible loans.

After intense scrutiny by various government entities, for-profit Corinthian Colleges abruptly ceased operations in 2015. Corinthian owned and operated Everest College campuses in Everett, Fife, Tacoma, Bremerton, Renton, Seattle and Vancouver until February of 2015, when they were sold to Zenith Education Group. The Fife location is no longer open.

The Department of Education found that while it was operating, Corinthian made widespread misrepresentations between 2010 and 2014 about post-graduation employment rates for certain programs at its Bremerton, Everett, Renton, Seattle, Tacoma and Vancouver campuses, and elsewhere across the nation.

About 5,700 Washington residents who attended programs at Corinthian schools received a letter in April explaining that they are eligible for streamlined federal student loan cancellation based on the Department of Education’s findings. The students were directed to fill out a short application for the Department of Education.

The Washington students were notified as part of a bipartisan effort by 47 attorneys general across the country to inform more than 100,000 former Corinthian students that they are eligible for streamlined loan cancellation.

The department has already granted loan forgiveness to about 27,000 former Corinthian students nationwide, but has yet to discharge their loans.

“Relieving these hard-working Americans of their fraud-induced student debt will free them to participate more fully in their local economies, or even continue their educations with reputable schools,” the letter explains.

Attorney General Ferguson is committed to standing up for students by going after predatory for-profit colleges and making sure loan servicing companies play by the rules. He has also cracked down on debt adjustment companies that charge fees to help borrowers consolidate their federal student loans and enroll in income-driven repayment plans — tasks that borrowers’ loan servicers can and should help them with for free. More information on the office’s student loan work, including its Student Loan Survival Guide, is available here.

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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.

Contacts:

Peter Lavallee, Communications Director, (360) 586-0725; PeterL@atg.wa.gov