Yesterday, the U.S. Department of Education announced new steps to protect students from abusive for-profit colleges, as well as a new debt relief process for students at Corinthian Colleges – which operated schools under the names Everest, Heald, and Wyotech.
Information for borrowers is available at the Federal Student Aid (FSA) website, at our new toll-free number for Corinthian students at (855) 279-6207, and from your loan servicer.
Background on what happened at Corinthian
Corinthian Colleges, Inc. has been the target of consumer and taxpayer protection enforcement efforts by the federal government and other authorities. The Department of Education investigated and found that between 2010 and 2014, Heald College misrepresented the job placement rates of many of its programs. Investigations by other entities are ongoing. Over the past year, Corinthian sold off many of its schools, and the remaining campuses closed shortly before Corinthian went bankrupt.
We’re committed to making the debt relief process as simple, streamlined, and fair as possible. That’s why we’re taking several steps to help borrowers, including appointing a “special master” to help us create a straightforward process for debt relief and implement steps to reduce the burden on borrowers.
Options for Debt Relief
Our Department is committed to helping students affected by the closure of these schools, or who believe they were victims of fraud by their school. Today, we announced next steps to support students who attended Corinthian schools. Here are answers to some common questions about debt relief, depending on your situation.
I attended a Corinthian school that closed
On April 27, Corinthian College closed its 30 remaining locations (see the list of those closed schools). Students who attended any of these closed schools any time after June 20, 2014 have two options:
- Apply for a closed school loan discharge
- Transfer earned credit to another institution to continue his or her education in a comparable program. (Students who select this option may still qualify for defense to repayment of previous loans – more information can be found below.)
A closed school discharge means that 100 percent of the federal student loans you took out to attend the school that closed may be forgiven, including a reimbursement of amounts you already paid back. You can find instructions and a form for seeking closed school debt relief here, or by contacting your loan servicer.
A closed school loan discharge may be an option for you if:
- You did not finish your program at a Corinthian school
- You did not already transfer your Corinthian credits to another school in a similar program (for instance, if you were taking a criminal justice program and you transferred to another criminal justice program, that would be similar)
- You were attending the school when it closed, or withdrew no later than June 20, 2014. A closed school discharge normally only applies to students who withdrew (without completing their program) within 120 days of the school’s closing date, or were attending when the school closed. But for Corinthian students, the Secretary of Education has extended the timeframe to include any Corinthian student who withdrew from one of its closed schools on or after June 20, 2014
Please note that if you choose closed-school debt relief, you can’t transfer your credits to a comparable program at another institution.
Visit studentaid.gov for more information on closed-school loan discharge.
What if I want to transfer my credits?
If you transfer your credits to a similar program at another institution, you cannot request closed-school debt relief. However, if you believe you have a claim against your school under state law, such as fraud, you may still pursue debt relief based on borrower defense to repayment, as described below – even if you transfer your credits to another school
What if I need help?
Visit the contact us page on the FSA website, or use any of the options listed above. Or, for further help, the Department is working with an independent group of organizations and institutions that are setting up a volunteer advising corps to help Corinthian students navigate the different options. Contact them to talk to a volunteer counselor. (Note that as the Department is not managing this initiative, it cannot endorse any advice that a student may receive.)
I believe I was a victim of fraud or another violation of state law at a Corinthian school (whether that school closed or not)
If you were a student at a Corinthian School—Everest, Heald, or Wyotech—and you believe you were a victim of fraud or other violations of state law by the school, you can make a claim for debt relief under a legal rule called “borrower defense to repayment.” This rule applies to all public, private and for-profit schools across the country, and requires students to show that they have a legal claim against their college.
If you were a student at a Corinthian school and you apply, or intend to apply, for borrower defense, you have the option to place your federal loans into forbearance (a special permission to stop payments) while your claim is being resolved, to ensure you do not fall behind on your loan. For students in default, you may request a stop to collection activity. However, interest will continue to accrue during the forbearance or stopped collections period. You may also decide to opt out of forbearance or stopped collections.
Visit studentaid.gov/Corinthian for more information on filing a borrower defense claim and on putting your loans into forbearance
For Certain Heald College Students
The Department has carried out an investigation and determined that Corinthian misrepresented job placement rates for a majority of programs at its Heald College campuses between 2010 and 2014. In an effort to simplify and speed up the process of applying for loan forgiveness, the Department has established that if you relied on those incorrect placement rates, you may be entitled to a discharge of their Federal Direct Student loans you took out to attend those programs through a streamlined process. That process can be done by filling out a straightforward attestation form. In addition, you may request to have your federal loans placed into forbearance or, for defaulted loans, to have collections stopped while your claim is reviewed.
Visit studentaid.gov/Corinthian for more information about how the Heald College findings may affect you.
If you are a Corinthian student seeking debt relief of any type and didn’t get your question answered, please visit the FSA website or call our toll-free number, (855) 279-6207, and a staff member will provide the information you need.