Virginians who attended defunct for-profit colleges eligible for loan forgiveness

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  Virginia Attorney General Mark Herring, photographed on Tuesday, Feb. 4, 2014.  Adrin Snider, Newport News Daily Press/MCT
Virginia Attorney General Mark Herring, photographed on Tuesday, Feb. 4, 2014. Adrin Snider, Newport News Daily Press/MCT

Virginians who attended defunct for-profit colleges eligible for loan forgiveness

by: Danielle Douglas-Gabriel | .
The Washington Post | .
published: December 07, 2016

Virginia Attorney General Mark Herring on Tuesday said his office is notifying some 5,300 people who attended a chain of defunct for-profit colleges of their eligibility for federal student loan forgiveness.

Corinthian Colleges, a chain of for-profit schools felled by charges of fraud and predatory lending, operated branches of its Everest College in Tysons Corner, Newport News, Arlington and Chesapeake, Va. before shutting down last year. Those locations are among the 91 campuses involved in a government investigation that found Corinthian lied about the number of students at its Everest and WyoTech schools who landed jobs between 2010 and 2014.

Evidence in that case is supposed to make it easier for students who enrolled in those schools to have their education debt canceled through what's known as "borrower defense to repayment." The statute wipes away federal loans if a school used illegal or deceptive tactics to persuade students to borrow money for college, but the claims process is time consuming, and there is no guarantee of approval.

To speed up the process, the Education Department in March said it would group the submissions of students from the Everest and WyoTech campuses involved in the investigation, the same action it took in another case concerning Corinthian's Heald Colleges. At the time, education officials estimated that 250,000 students who attended Everest and WyoTech in 24 states, including Virginia and Maryland, might be eligible for debt relief.

Yet just 82,000 people have filed claims as of early October, despite efforts by the Education Department to notify former students through mailers, email, partner organizations and other means. Of those claims, the agency has approved 15,694 for a total of $247 million in loan forgiveness.

The tepid response from former students is leading education officials to team up with state attorneys general to get out the word. Anyone who was enrolled at one of the Everest or WyoTech programs listed on the department's website can apply to have their federal student loans forgiven by filling out an attestation form found at StudentAid.gov/corinthian#ev-wy.

"In many cases students are still repaying the debt they incurred based on false pretenses even though Corinthian Colleges and its subsidiaries have closed their doors," Herring said, in a statement. "If you think you might be eligible, keep an eye on your inbox and contact us or contact the Department of Education directly if you have any questions."

Herring's office plans to email students in the next few weeks informing them of their eligibility. Only loans made directly by the federal government are eligible, not those originated through the government's old bank-based lending program. That distinction has led to disappointment for people like Jessica King, who graduated in 2008 with a medical assistant certificate from Everest in Newport News.

King, 34, said her defense claim for $13,000 was recently denied because her federal loans were made through the bank program, known as the Federal Family Education Loan program. Her claim fell outside of the scope of the government investigation, but King believed she had a good shot of succeeding because of the circumstances of her case.

Two years ago, King learned that she owed $30,000 for the eight-month certificate program at Everest, after trying to enroll at Thomas Nelson Community College in Hampton, Va. She only recalls signing up for one $1,200 loan, but remembers being pressured to sign all sorts of documents during her time at Everest.

Much of the debt King accrued came from Corinthian's Genesis program, an in-house operation that lent money at interest rates as high as 15 percent. King's Genesis loans were canceled through ECMC Group's acquisition of Corinthian campuses, but she is still on the hook for $13,000.

"All of this debt should be forgiven because of what Corinthian did," King said. "I just want to be able to go back to school, but at this point I don't even know if I can. I have to worry about putting my 15 year-old through college in a couple of years."