Connecticut’s attorney general and his counterparts in 10 other states are pressing federal education authorities to cancel student loans for pupils enrolled at for-profit colleges that engage in deceptive marketing and other practices.
Attorney General George Jepsen announced Tuesday he and 10 fellow attorneys general are signatories on a letter sent to U.S. Education Secretary Arne Duncan urging forbearance for student-borrowers victimized by Corinthian College and other for-profit institutions proven to have engaged in wrongdoing when recruiting pupils as borrowers.
Many who fail to graduate are saddled with huge tuition debt, the accumulation of which is proving burdensome to state and national economies by slowing victims’ purchases of houses, automobiles and other consumables.
The attorneys general asked to be included in the reform efforts of the education department and its recently appointed “special master,’’ Joseph Smith. They also demand Corinthian borrowers are ensured immediate debt relief.
“Students in Connecticut and across the country – including many military veterans – are coping with high student loan debts that they incurred after aggressive sales tactics and deceptive marketing practices that exploited their hopes and dreams of achieving a quality education,” Jepsen said.
In addition to Connecticut, the letter was signed by the AGs of California, Illinois, Kentucky, Maryland, New Mexico, New York, Oregon, Pennsylvania and Washington.
The letter raises a number of concerns about the Department of Education’s state law discharge process and offers several recommendations, including:
- Easing the burden on students to achieve relief: Borrowers should have a clear process for applying for a discharge of their state loans based on violations of state law. Students should not be held to a difficult burden in proving that they were deceptively induced to enroll or that the school engaged in other unlawful acts. While many consumers have been victimized by for-profit schools, they are often in a poor position to prove that the schools committed unfair or deceptive practices.
- Allowing attorneys general to make showings of state law violations: As part of the review process, the department should invite interested attorneys general to provide supporting materials regarding unfair and deceptive practices. Attorneys General, who are experienced in investigating trade practice violations and have access to substantial information about for-profit college abuse, are typically better equipped to demonstrate schools’ unfair or deceptive practices than individual students.
- Discharging loans of groups: Provide a mechanism by which the loans of entire cohorts of students may be discharged. The department should accept findings or evidence from government entities on behalf of the students.
- Ensuring relief regardless of loan status: The department should clearly state that discharges are available for Direct loans, Federal Family Education Loan Program (FFELP) loans, PLUS program loans and loans that have been consolidated into new debt. The department should also make clear that students may recover amounts already paid on Title IV loans.
