Warner, Connolly press Education Department on behalf of former Corinthian students

congressU.S. Sen. Mark R. Warner (D-VA) and U.S. Rep. Gerry Connolly (D-VA-11) contacted U.S. Secretary of Education Arne Duncan Monday with questions on behalf of former students of Corinthian Colleges, Inc., a chain of for-profit schools that once operated more than 100 campuses in the U.S. and Canada, including four in Virginia under the Everest College banner – in Chesapeake, Newport News, Vienna, and Woodbridge – that were sold in February.

“While the four campuses in Virginia haven’t closed, we are hearing from students who attended these facilities and have been left with unmanageable debt and incomplete certifications and degrees,” wrote Sen. Warner and Rep. Connolly. “While there is a larger debate to have about transparency, gainful employment, and the 90/10 rule, we believe that our focus now should be on outreach, borrower education, and customer service to these students.”

Headquartered in Santa Ana, Ca., Corinthian operated more than 100 for-profit colleges under three brands: Heald College, Everest (which includes Everest College, Everest University and Everest Institutes), and WyoTech Technical Schools.

On June 19, 2014, the Department of Education’s Federal Student Aid office placed Corinthian on an increased level of financial oversight after the company failed to adequately address concerns about its practices, including falsified job placement, academic achievement, and attendance data.  On July 3, 2014, Corinthian reached an agreement with the Department of Education to transition then-Corinthian students in such a way that minimally disrupted their studies. After reaching a conditional agreement with the U.S. Department of Education, on February 3, 2015, Zenith Education Group – a newly created nonprofit provider of career school training and an entity of ECMC Group – announced its acquisition of 56 Corinthian campuses. Zenith now operates all four Everest campuses in Virginia.

On April 14, 2015, the Department of Education announced it had confirmed hundreds of cases of misleading job placement rates to current and prospective students, and announced its intention to impose a $30 million fine against Corinthian for misleading consumers. Facing this fine and numerous lawsuits and investigations by more than a dozen state attorneys general and federal authorities, the chain closed its remaining 30 campuses on April 27 and filed for Chapter 11 bankruptcy on May 4.

Students enrolled at one of these 30 campuses within 120 days of the closure date have clearly articulated options for closed school loan discharge, academic credit transfer, and/or teach-out arrangements between the closed school and other schools that are still open for teaching. However, the options available to former Corinthian students—including those currently and formerly enrolled in Virginia Everest campuses—are not as clear-cut and may be unclear to students. Sen. Warner and Rep. Connolly wrote Sec. Duncan with questions they believe should be answered to ensure potentially affected Virginia students have access to the information and resources they need to navigate their options for financial relief going forward.

The members wrote, “Understanding that the magnitude of this closing is unprecedented, there are several questions that we believe should be thoughtfully answered to ensure a positive consumer experience as the Department considers how to address the needs of former Corinthian students,” including:

  1. By when does the Department anticipate making initial contact with all eligible students regarding their options for credit transfer, teach-out, or closed school loan discharge?
  2. Does the Department’s current student aid hotline have the capacity to absorb the influx of former Corinthian students?  Do you anticipate the volume of students being sufficient to justify a dedicated hotline?
  3. What steps is the Department taking to ensure that former Corinthian students receive accurate and reliable information when they correspond with Department staff or contractors?
  4. Does the Department anticipate a surge in defense to repayment claims?  If so, what steps are being considered to standardize the application process?  What potential obstacles might delay implementation of this process?
  5. What authority, if any, does the Department have unilaterally, or in coordination with Treasury, to temporarily halt the collection of current and/or delinquent student loan debt from former Corinthian students?”

A PDF of the signed letter is available here.


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