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Illinois Attorney General Lisa Madigan
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July 13, 2017

MADIGAN DEMANDS U.S. DEPARTMENT OF EDUCATION EXPLAIN DELAY IN LOAN FORGIVENESS TO FORMER CORINTHIAN COLLEGES STUDENTS

Attorney General Madigan Issues FOIA Request to Department & Says With Findings of Fraud Made, Department Is Inexplicably Delaying Forgiveness to Impacted Corinthian Students

Chicago — Attorney General Lisa Madigan today issued a Freedom of Information Act (FOIA) request to the U.S. Department of Education requesting information on why the Department has delayed loan forgiveness to former students of for-profit Corinthian Colleges Inc. who attended programs where the Department has made findings of fraud.

Across the country, thousands of former Corinthian students who are eligible for loan forgiveness by the Department of Education due to Corinthianís fraudulent conduct have yet to see their loans forgiven. Some students are nearing the end of 12-month forbearances or collections bans on their loans and face restarting monthly payments on debts that should be canceled. In some instances where the Department has extended loan forbearances, student loan debt servicers are not recognizing the extensions and are demanding payments from students.

After intense scrutiny by various government entities, Corinthian Colleges abruptly ceased operations in 2015. Corinthian owned and operated seven Everest College campuses in Illinois. Madiganís investigation into Corinthian revealed widespread misrepresentations made to prospective students, supporting the Department of Educationís own findings of fraud that Corinthian made systemic misrepresentations between 2010 and 2014 about post-graduation employment rates for certain programs at its campuses.

ďThe Department of Education has clear evidence of Corinthianís widespread misrepresentations and yet they are inexplicably failing to cancel these fraudulently induced loans,Ē Madigan said. ďEducation Secretary Betsy DeVos should ensure that the Department of Education acts immediately to forgive debt for thousands of deserving students so they can obtain a quality education and rebuild their lives.Ē

In her FOIA request, Madigan seeks documents regarding Illinois student loan borrowers who attended Corinthian programs affected by fraud whose applications are pending, the Departmentís findings of fraud at Corinthian campuses in Illinois and timelines for reducing the backlog of pending applications. Madigan has requested documents dating back to January 1, 2010.

Former Corinthian students in Illinois were among more than 100,000 former Corinthian students who were notified as part of a bipartisan effort by Madigan and 46 other attorneys general across the country that they are eligible for streamlined loan cancelation.

Last month, Madigan led a coalition of attorneys general and other state officials demanding the Department of Education stop delaying its program to cancel federal student loans for thousands of Illinois students victimized by predatory for-profit colleges, including Corinthian. In a letter sent to Secretary DeVos, Madigan urged the Department to review the mounting applications and work to forgive loans already approved to be canceled.

Attorney General Madigan has investigated numerous for-profit schools for fraud and repeatedly called on the Department of Education to immediately forgive federal loans for students who were victims of fraud at the hands of for-profit schools.

Madiganís office runs a free Student Loan Helpline to provide student borrowers with free resources about repayment options and avoiding default. Borrowers can also call the Helpline to file a complaint about loan servicing. The Helpline is (800) 455-2456 (TTY: 1-800-964-3013). More information can also be found on her website.

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