Defrauded Corinthian Students Still Subject To Draconian Debt Collection Actions

Nearly 80,000 students of defunct for-profit giant Corinthian Colleges are facing some form of debt collection, even though the Department of Education unearthed enough evidence of fraud to forgive their student loans, says Sen. Elizabeth Warren.

Source: Feds found widespread fraud at Corinthian Colleges. Why are students still paying the price?

“It is unconscionable that instead of helping these borrowers, vast numbers of Corinthian victims are currently being hounded by the department’s debt collectors — many having their credit slammed, their tax refunds seized, their Social Security and Earned Income Tax Credit payments reduced, or wages garnished — all to pay fraudulent debts,” Warren wrote to King.

Warren’s staff asked the department for information about the outcomes of former Corinthian students with federal loans. They learned that there are 79,717 people who are eligible to apply for loan forgiveness but are being pursued by debt collectors. The government is using its extraordinary collection powers to seize the tax refunds, tax credits and other benefits of more than 30,000 of those borrowers, while garnishing the wages of another 4,000, according to department data.

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