Letter to Arne Duncan, Secretary of Education - Debt Relief of Corinthian College Students
Letter
Dear Secretary Duncan:
The collapse of Corinthian Colleges, Inc. has demonstrated the critical need for comprehensive defense against repayment regulations that provide a clear process for debt relief for defrauded students. More than a year after the Department of Education (ED) expressed concerns about Corinthian's practices, including falsifying job placement data and allegations of altered grades, it is long past time that defrauded students have a clear and accessible pathway to relief.
I encourage ED and the negotiating committee to issue regulations that include a class-wide automatic student loan discharge for Corinthian borrowers. While I commend ED for issuing an automatic discharge for Heald College students, I believe it is clear that the deceptive practices cited in the Heald discharge are pervasive in the larger Corinthian system, and all Corinthian students should qualify. In the future, ED should work quickly to identify and issue automatic group discharges where evidence of wrongdoing warrants it.
The regulations also should eliminate current barriers to relief and mitigate any unintended consequences of the debt relief process. Current barriers include the attestation form requirement, the restriction on relief to direct loan recipients only, the complexity of the defense against repayment application, and the inability of borrowers to update their applications. Potential unintended consequences for borrowers seeking relief include the interest that continues to accrue when ED automatically places loans in administrative forbearance, possible tax consequences of loan discharge, and the potential for federal regulations to preempt stronger state laws. I ask ED and the negotiating committee to carefully consider these issues as you develop regulations.
Defrauded borrowers must have a clear and comprehensive path to relief. I urge your swift and thorough action in issuing regulations that will help current Corinthian students and future defrauded borrowers alike.
Sincerely,
Mark Takano
Member of Congress
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