By Jona Jaupi
Photo courtesy of Roger Blackwell.
It was just last November that Latonya Suggs, a 28-year-old mother, pleaded her case in a public hearing about a problem in the American education system. Suggs professed to the Department of Education’s (DoED) Undersecretary Ted Mitchell and Deputy Assistant Secretary Lynn Mahaffie her issues with Corinthian Colleges Inc. (CCI), a for-profit college system based in Orange County, CA. Suggs was left with over $70,000 in debt upon graduating from Corinthian’s Everest College.
It was also this past fall that Corinthian came under the critical observation of federal regulators. The for-profit college chain was pressured into selling off 56 campuses to a non-profit student-debt collector for $24 million, according to Chris Kirkham’s Los Angeles Times article. Another 14 campuses across Ontario got pushed into bankruptcy by Canadian authorities.
Additionally, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit accusing Corinthian of inducing students to enroll in its programs through “false and misleading representations about its graduates’ career opportunities.” The lawsuit led to $480 million of private student loans being forgiven.
In February 2015, Corinthian received a delisting notice from NASDAQ, suspending them from the market. The company failed to comply with the US Securities and Exchange Commission’s (SEC) rule of timely filing periodic fiscal reports. CCI did not intend to appeal NASDAQ’s suspension; the company was officially delisted on Feb 25.
Despite Corinthian’s market delisting, plus the federal government’s seemingly successful tactics of dismantling the for-profit college chain, the fact remains that hundreds of thousands of students are actually left in debt. They graduate and then fail to land the jobs they were promised. Moreover, for the certain students who were applicable for private loan-forgiveness due to CFPB’s lawsuit, only about 40 percent of their loans were paid off.
“Everest promised me things such as career hunting skills, a quality education, and a place that I can work in my area,” Suggs said during her public hearing for the DoED. “I took out $40,000 in loans for a criminal justice degree that most employers in my city do not even recognize.”
Because Corinthian College graduates came up short on their prospective post-graduation job offers, a disappointed Suggs claimed that the DoED failed her. She believes it is the Department’s responsibility to monitor schools and make sure that they are providing quality education, rather than turning a blind eye to increasing evidence of Corinthian’s wrongdoings.
However, some students aren’t succumbing to these debts so quickly. In an unexpected turn of events, Suggs and 14 other students decided to take a stand against the DoED by refusing to pay back their federal loans. Calling themselves the Corinthian 15 (C15), the group of students declared a deliberate debt strike that gathered national support from Senate Democrats and several state attorney generals.
The first member of Congress to publicly support the C15 is Rep. Maxine Waters (D-Calif.), according to The Huffington Post. She was quoted saying that these students made a decision against their “predatory lending.”
In addition to backing from government officials, advocacy groups also came forth for the C15. Their biggest supporter is Debt Collective, a creditor advocacy group that has bought more than $13.3 million in student debt. Debt Collective has not enforced reimbursement as a way of forgiving the debt.
The fight continues as lawyers from the Department of Justice argue that the DoED holds the authority and power to relieve students of their debts if determined that the students were defrauded. In addition, California’s Attorney General Kamala Harris has filed suits against Corinthian College since 2013. Because of the continuing complexities of the many national, local, and personal problems with CCI, the public is awaiting to see how the fate of for-profit college chain unravels.