SAN FRANCISCO (CBS SF) — California Attorney General Kamala Harris sent a letter Monday signed by the attorneys general of seven other states, urging the U.S. Department of Veterans Affairs to restore benefits to veterans victimized by ‘predatory’ practices by for-profit schools.
The letter comes in the wake of the sudden April 2015 closure of for-profit Corinthian Colleges Inc., which shuttered 28 college campuses leaving roughly 16,000 students in the lurch mid-semester.
The closure, in part, was a result of a 2013 lawsuit filed by Harris against Corinthian for false advertising and deceptive marketing targeting vulnerable, low-income students and misrepresenting job placement rates to potential and current students, investors and accrediting agencies.
The attorneys general of California, Massachusetts, Connecticut, New Mexico, Illinois, Oregon, Kentucky and Washington, in a joint letter to Veterans Affairs Secretary Robert McDonald on Monday, urged him to restore educational and vocational rehabilitation benefits to veterans who fell prey to predatory practices carried out by Corinthian Colleges and other for-profit school.
Harris, on Thursday, called on the U.S. Department of Education to do more to protect students defrauded by for-profit colleges.
The Department of Education is in the process of holding required negotiated rulemaking sessions to determine how students can get relief from federal loans used at a schools that deceived the students.
“Too many students defrauded by for-profit colleges remain buried under mountains of student debt,” said Harris. “I call on the Department of Education to revise their proposed regulations to ensure meaningful debt relief is available to any student misled by a predatory college.”
The closure of Corinthian Colleges included the shuttering of Heald College’s 10 California locations, as well as campuses in both Hawaii and Oregon. It also included 13 Everest and WyoTech campuses in California, as well as Everest College Phoenix, Everest Online Tempe in Arizona, and the Everest Institute in New York, according to the company.
Following the shuttering of the 28 schools, Harris’s office and the Department of Education found that job placement rates were widely misrepresented and inflated, and that thousands of the students have asked the Department of Education to void their federal loans because they claim they were deceived by Corinthian.
Harris said many other students have been deceived by other for-profit institutions that also used dishonest tactics to attract students and says federal law gives students the right to have loans discharged if their colleges have engaged in certain types of unlawful conduct.
“Unfortunately, Corinthian’s misconduct is not unique,” the letter states.
The letter argues that “student veterans are likely targeted by these institutions because the funds provided by these educational benefits do not count toward the federal 90/10 rule that limits for-profit colleges to receiving a maximum of 90% of their revenue from Title IV federal student aid sources.”
The attorneys general maintain that for-profit schools, such as Corinthian, “specifically target and prey on student veterans through recruitment events using false promises of job prospects and dishonest job placement rates…Moreover, student veterans often find themselves with limited to no benefits remaining, leaving them unsupported in reaching their educational and career goals.”
After a sharp increase in the number of student borrowers asserting their rights to have loans discharged, the Department of Education has initiated a negotiated rulemaking process for interested parties to provide input on new regulations governing repayment when a school has deceived a student.
Harris’ office said, however, that the Department of Education this month unveiled proposed language that would be “narrowing, limiting, and delaying student relief” by restricting the categories of misconduct that would qualify for a defense to repayment and including a two-year statute of limitations.
Harris’ office states,”This is patently unfair given that there is no corresponding statute of limitations for debt collectors in going after students for federal student loans.”
Harris continues to call for changes to the new regulations, arguing that the regulations must provide procedures for automatic relief to victimized students and not allow the school to make the process difficult or expensive for students.
The attorneys general urged Veterans Affairs to restore G.I. Bill and Vocational Rehabilitation and Employment benefits to student veterans who used those benefits at schools found to have engaged in misleading and deceptive behavior.
Regarding Corinthian’s closure, the letter states, “Rather than being honored, the veterans who enrolled in Corinthian schools were cheated out of these benefits.”
By Hannah Albarazi – Follow her on Twitter: @hannahalbarazi.