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June 5, 2017

Miller, State AGs Express Concerns over U.S. Education Department Delays in Student Loan Forgiveness

More than 500 Iowa students of former for-profit Corinthian Colleges Inc. should have loans canceled

DES MOINES – Attorney General Tom Miller joined a group of attorneys general today in expressing concerns to U.S. Education Secretary Betsy DeVos about the department’s extended delays in canceling federal student loans for students victimized by predatory for-profit colleges.

In a letter to DeVos, attorneys general in 19 states plus the District of Columbia urge the Education Department to review the mounting applications and work to timely finalize the discharge of loans where forgiveness has already been approved.

The letter seeks information on what the department is doing to rectify the growing backlog of applications, and to provide a time frame for discharging the student debts. In addition, since the agency has already determined that these students are eligible for loan forgiveness, the letter urges DeVos to abandon the application process and automatically discharge all eligible loans.

Across the U.S., former Corinthian Colleges Inc. students are experiencing delays in review and approval of their loan cancelation applications. About 27,000 students nationwide—including more than 500 Iowans—have been approved for loan forgiveness and have yet to see their loans discharged. Some students are nearing the end of 12-month forbearances on their loans, and face restarting monthly payments on debts that should be canceled.

After intense scrutiny by various government entities, including Miller’s office, Corinthian abruptly ceased operations in 2015, transferring some of its campuses to a non-profit called Zenith Education Group. The schools include Everest Institute, Everest College, Everest University, and Heald College.

The Education Department then found that between 2010 and 2014, Corinthian made widespread misrepresentations about post-graduation employment rates at its Everest campuses and elsewhere across the nation.

Iowa residents who attended programs at Corinthian schools received a letter in April explaining that they are eligible for streamlined federal student loan cancellation based on the Education Department’s findings. The students were directed to fill out a short application for the department.

The students were notified as part of a bipartisan effort by 47 attorneys general across the country to inform more than 100,000 former Corinthian students that they are eligible for streamlined loan cancellation.

“Relieving these hard-working Americans of their fraud-induced student debt will free them to participate more fully in their local economies, or even continue their educations with reputable schools,” the letter states.

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