Government to Forgive Student Loans at Corinthian Colleges

Parents Forum
61

If you borrow money, it is your fault. There are other colleges in this country besides high priced, fly by night options like Corinthian. So, if one chooses to go to Corinthian, and borrows money to do it, one is obligated to pay it back, at least I hope so because it sure as heck isn’t anyone else’s problem so please, for the love of God, spare me the star spangled banner speech about how society being better off with an educated population.

The premise that it costs $90K to get an education is false. Is Corinthian the only university in the USA? It must be that way everyone who runs up a big tab going there can be painted as helpless, hopeless and without more intelligent options and Uncle Gubberment can come in and save the day.

You started with that false premise and just stuck your head in the sand and stuck with it. Congrats on planning ahead with the grandkids. That’s smart. You didn’t answer my question about whether or not you wanted to pick up the tab for the Corinthian kids if it was your money and not someone else’s money. I didn’t really expect you to answer it. But, since you are paying for your grandkids to go to school I’d assume you realize how unfair it is for people like you, and me, to then have to pay for people that don’t work and save for college costs or take advantage of private resources like scholarships. You ignored my comment about that too. That’s okay. I knew you had nothing to say to that. I, once again, didn’t expect a reply on that point.

62

You also seemed really sad that it takes some kids 6 years, and not 4, to get their education which is how the bill ends up at $90K. Or is 7 years? How about 8? Where does it stop? Oh, I keep forgetting when you are spending other people’s money it really doesn’t matter does it. Society is better off and all.

63

@GoNoles85: If you borrow money, it’s your fault. If you are defrauded into doing so, it’s not. The Corinthian kids were defrauded.

Frankly I’m not entirely convinced on the premise. Student loans necessarily go out to only people who lack the education necessary to evaluate them. They also are the result of a system totally outside the borrower’s control where an open government spigot backed by draconian lending law and oligopolistic, leader follower behavior has resulted in a grossly distorted market. But sure, let’s say it’s the borrowers fault. Except for that whole fraud thing, right? Or should they just have known better?

As for picking up the tab, yes, I do want to and yes, it is my money. I pay a pretty hefty share of the tax revenue and I’m delighted it’s going to reduce the debt burden. Its not unfair at all that people in school today have a reasonable shot at coming out without staggering debt. What’s unfair are the people forcing them to steal from their future in order to pay for those people’s present.

64

You make the silly assumption that “student loans go out to ONLY people who lack the education necessary to evaluate them.” That is baloney. Any of the Corinthian students could have gone to other colleges that cost far less but they choose to borrow money to go to Corinthian. That isn’t fraud, these aren’t 10-year olds either, these are high school graduates or people with GED and the terms of the loan are hardly rocket science.

You go on to say that the borrowers are forced to steal from their future to pay for their educations. They were forced? They had no other options? Are you sure about that, Demo? Are you even sure there was fraud? Just because some hack at the department of ed alleges there was fraud that doesn’t mean all of the thousands of C students were defrauded into borrowing money for a C education, some may have been, but I don’t think all of them were. But lets just pretend it was all of them! Why not? It makes about as much sense as anything else you’ve said.

The government subsidizes education so we all get that it benefits society. That part is fine. Cue the star spangled banner again, please. The problem lies in how the government gets all intertwined in the payment part of the deal. You missed that point 30 posts again so you probably will miss that again. Anyway, have a great day. We might disagree on a few points but that’s okay at the end of the day. Neither one of us is policy makers on this issue. We can both advocate for the “right” answer and hopefully this country can get it right.

65

Most of us took basic algebra in middle or high school. And it’s covered in the GED.

I understand the position “College is too expensive, more money should be allocated to public schools from the government.” I don’t understand the position “College is too expensive, so people who borrowed money for it shouldn’t have to pay it back.”

And can we stop calling this predatory? People didn’t call Madoff predatory. They called him a fraud. These guys are a fraud. Lenders aren’t predatory or fraudsters. They loan money to people who want it at terms agreed to by both parties.

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@GoNoles85: I presume your claim about what all Corinthian students should have done is based on your extensive surveying? Maybe for some there were cheaper options. So what? It’s ok to defraud them because they could have chosen someone else? Is that like, “well you chose to put money in the bank that was robbed so really it’s your own fault”?

I suppose it’s easier for you to pretend the fraud didn’t happen. I mean, it’s not like government investigations or lawsuits or ridiculously easy to Google statements by Corinthian, some of which I linked you, exist, right? If “work and save!” doesn’t work, it’s easier to pretend there’s no problem at all?

@Vladenschlutte: I’m good with calling it predatory but thanks for asking. When colleges go after veterans by claiming false employment numbers, I think “predatory” fits the bill nicely.

Algebra isn’t going to cut it with student loans. You need to understand all the various terms and conditions, the dozen programs not listed, and psychically predict all the changes to each of them. What I don’t understand is why the same people who think it’s perfectly reasonable to make students pay the exorbitant sums the system demands complain so much when students use that exact same system to not pay.

67

Demo,

I assume you have proof of C’s fraud? I followed one link you posted in #51 that included this in it:

Dozens of students have filed lawsuits or demands for arbitration, charging that they were misled by the company’s admissions representatives, including about their chances of landing a good-paying job upon graduation.

So C’s admission people misled them and they have filed suits to recover their losses. Okay. Not my problem then is it? It isn’t Mr. and Mrs. US Taxpayer’s problem either is it? And just because some bozo at the department of education thinks he can wipe away debt because he has a bleeding heart, I am hoping, since congress funds his agency, that it is more talk of a clueless democrat than anything else. I don’t think he has the authority to do this to begin with, I could be wrong.

So where is your proof of fraud?

If there was fraud let the plaintiffs deal with it in the courts. You’ve heard of courts, right?

It is blatantly obvious that the C students had other choices even if they lives in Alaska they could have taken online courses at any number of schools that are reputable including AZST.

You also wrote this:

Algebra isn’t going to cut it with student loans. You need to understand all the various terms and conditions, the dozen programs not listed, and psychically predict all the changes to each of them.

How do you know they didn’t understand the terms of the loans they took out? Where’s your proof they didn’t understand the loans? Why did they sign it if they didn’t understand it? Why didn’t they get someone with a high school education to explain it to them if they were so challenged that they can’t read?

The dozens of lawsuits ALLEGING (please look that word up) do not prove fraud and if the government investigators found fraud it is still a civil litigation matter and NOT the responsibility of the US Taxpayer.

I don’t see any statements by C that you linked to me. What, did C’s admission people GUARANTEE jobs or say the programs qualified people for jobs? How about the students sue the people that made those statements? It really has nothing to do with the taxpayers if you ask me. Now, that doesn’t mean some hard core liberal agency official doesn’t think there should be a bail out but thats a democrat for you.

Hopefully, there are enough people in this country to vote fools like that out. The head of the department of ed is appointed by Obama, he isn’t even voted in, although Obama was and in about a year, I’m sensing there is going to a change in guard in Washington and this bailout with disappear around then. Hopefully.

However, the democrats have become really good at buying votes with ridiculous statements like the one posted in the OP. And if Texas ever goes liberal it is over for the Republicans nationally. Demographically, Texas is headed that way by 2020 the last I heard.

What does all that mean?

Basically, my grandkids and your grandkids, the ones you and I paid for their education, will pick up the tab for all the C kids if the policy expressed in the OP happens. That is a damn shame if you ask me but I do believe there has to be enough people with common sense in Washington that what was announced by the department of ed will never happen. I see nothing on the department of ed webpage about it and I haven’t heard a word on the news shows I watch. Frankly, the whole policy, as expressed in the OP, is a bad joke for people who are honest and pay their own way. There is no way you can justify people like me having to cover a single penny of C student’s costs. It was 100% entirely their fault and whatever was expressed to them by C officials is not fraud and if it was fraud lets the courts sort it out one lawsuit at a time. They had other options, the link you posted in #51 Demo, mentions that C was 17 times more expensive than CC’s. They should have gone to CC’s like I did and my son did! They choose not. Fine. You pay you own bills then.

I’m not sure why that is hard for you to understand.

68

Why do you believe that the Department of Education does not have the authority to forgive loans originated by the Department of Education? You keep saying that and I think it’s puzzling because the ED has a long-standing practice of forgiving federal student loans in situations where a school has been wound down/shut down a la Corinthian. I think you might be confusing what you think the law should be (a matter of opinion with which reasonable people can disagree) with what the federal statutes actually provide (which is in the plain text of the statute).

I don’t agree with the position that people who borrow money for student loans shouldn’t have to pay it back. I do think that we need to crack down on schools like Corinthian before people enroll in them rather than waiting until it costs billions of dollars to sort out the mess.

I apologize now for something I said before – not all for-profit schools are scams, but there is something deeply flawed in this model. Debt cancellation is a big deal for the individuals who are receiving this benefit but let’s be honest; the taxpayers took the hit when these funds were originally disbursed. We wouldn’t have gotten the money back with or without debt forgiveness.

I read an article just today about how for-profit colleges like Corinthian [represent just 12% of the college population](http://ticas.org/sites/default/files/legacy/pub_files/CDR_2014_NR.pdf) but are involved in close to 50% of the federal student loan defaults. I understand the resentment and anger over this plan but let’s not kid ourselves by pretending like things were going well until this announcement was made.

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@ 67,

You are right. I haven’t the foggiest clue what the head of the DE is authorized to do or what exactly the taxpayer’s role is when it comes to students loans and FA. No idea. I am pretty sure, many years ago when I took out some student loans, I was responsible for that debt but who knows maybe Santa Claus was responsible or Hasbro since they print monopoly money.

I’ve already stated that the problem is the US Government either making (through the DE) or guaranteeing student debt (putting Mr. and Mrs. Taxpayer on the hook). The other problem, and this happened in the credit crisis/house bubble thing in 2008, is you have people who use credit recklessly then act like helpless victims later. That is a problem. This is a free enterprise economy and your stupidity is not my problem and never will be. If you choose to go to school and pay 17 times what you could have paid somewhere else don’t come crying to me.

I paid my own way and I paid my kids way through college so I don’t want to hear your sad stories. I don’t have grandkids yet but by the time they are born, I’ll pay their way too. I’ll be glad to do it. And they will probably start at CC’s just like I did and my kids did (or will in the case of my 17 year old son). We have a great CC in our backyard, we love it, it works perfectly for us.

If you choose to buy a $350K house on credit you better understand the terms of the loan you are taking out. All I expect out of the federal or state government is common sense policies. The idea that the government funding/sponsoring/supporting education is a common sense. And the government does do that. But the government really should have no role in helping people pay for education. That should be done privately. It can be done privately with hard work and saving. It can also be done privately through reasonable loans and scholarships. There is no need for the government other than to set the rules not make the loans or guarantee the loans.

Apparently, the definition of “fraud” in this case is the borrowers were really stupid. That is a new definition of fraud. Now, don’t get me wrong, if the school closed, that could be fraud, and there is a provision in the law, from what I’ve read on this thread, to help out students in that situation. Even then I don’t think some shmoo at the DE should get to make that determination without some oversight. I also think what is fraud should be determined in the courts where there are rules of evidence and so forth not by some bleeding heart democrat who is appointed into his cushy job. He needs to understand whose money he is spending if he forgives debt that is owed to Mr. and Mrs. Taxpayer.

70

When? If it was over 10 years ago than it’s kind of irrelevant.

When I first started college in 2004, the tuition at the big flagships in my state - Georgia State, University of Georgia and Georgia Tech - was around $3,000 a year. You could get the HOPE scholarship to cover your tuition if you had a 3.0 in high school, but even if you didn’t, $3,000 was money you could save from working a part-time minimum wage job as a college student. Just 10 years later the cost has quadrupled; in-state tuition at UGA, Tech and GSU is $12,000 a year. A person working 20 hours a week, 50 weeks a year at minimum wage can’t make enough money to cover that, let alone living expenses. Even if you worked 30 hours a week, your entire paycheck would go towards tuition - not housing, not food.

You’re saying that there are better options than $600 a credit, but these days there aren’t that many other options. Even if you start at a community college eventually you have to transfer to a four year college and that’s going to cost more. Even the CUNYs, traditionally low-cost public universities, are charging $400/credit. And at UGA, $12K a year for 15 credits is $800. I suppose you could go to our next tier down - a place like Georgia College and State University - but even that is $9,000 a year, not a whole lot cheaper, excluding room and board.

I’m sorry, but it’s a serious pet peeve of mine when people say stuff like “let these young whippersnappers work and pay their way through college like we did one to two generations ago” without acknowledging that the cost of education has far outpaced inflation and increases in the average wage over the same period.

And that’s from someone who is generally against loan forgivenness programs. I agree that we need to encourage students to borrow responsibly and to repay what they borrowed. I also agree that we need to put limits on how much is forgiven through our regular forgiveness programs. However, this is a separate situation - this is a company that deliberately preyed on the most vulnerable students, took their money and gave them what they knew to be useless skills. They deliberately misled students in their marketing approaches.

And there are limits on how much students can borrow per year. There are also requirements in place for job placement, although they are newer.

That’s optimistic. Lenders aren’t charities. They’re going to want to lend to people who they feel have high chances of repaying that debt, and those people are going to be kids with wealthy or at least middle-class parents who the banks can lean on in case the student defaults. They’re not going to lend large amounts of money to poor inner-city kids, even if they do get into Harvard (and there aren’t that many of them). They definitely aren’t going to lend to poor inner-city kids who more realistically get into their regional public university or some tuition-dependent college.

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Agreed, though I would change “average wage” to “pay levels that high school graduates can earn” to make it more relevant to working one’s way through college scenarios.

72

The COA at my public, in-state U is 26k-28k depending on your class level. There are zero state scholarships. The full Pell is less than 1/5 of that. (The local directional that I could theoretically commute to would still cost $10k just for tuition.)

But you’re right… every student should just be able to pull that out of their summer jobs that pay less than $8/hour 8-|

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Thanks, in advance, for any info.
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Just 10 years later the cost has quadrupled; in-state tuition at UGA, Tech and GSU is $12,000 a year. A person working 20 hours a week, 50 weeks a year at minimum wage can’t make enough money to cover that, let alone living expenses. Even if you worked 30 hours a week, your entire paycheck would go towards tuition - not housing, not food.

-Which is why I said if you wait until you are 18 and then start thinking about financing the costs of an education it is much, much harder. But why wait until you are 18? Why not start saving earlier?

-You are right, a minimum wage isn’t going to cut it. If a young person earns $3K a year and half of that is spent on living expenses and other needed things, like cell phones, they end up with half of what they earned in the bank. That is a reality. I get that. I worked and saved and paid for most, but not all, of my education and I borrowed the rest. But you guys and gals are right the cost of education has out paced the wage rate so that creates and even bigger disparity that must be covered.

-In most cases, the parents, hopefully, can chip in something. Here again, maybe not everything. I understand and completely respect that many folks in this country live paycheck to paycheck so helping junior go to college is not an option. My wife’s sister, who lives nearby, is in that situation. She has more than one child too. So if the parents contribute nothing or close to nothing the student might have to go 20% savings and 80% student debt.

-And if that hard working student goes to a CC and lives at home for a few years while going to a CC it can work.

-And if that hard working student gets a Hope Sch. or Bright Futures scholarship or similar that can really help.

-And if that hard working student can’t get the Hope or BF scholarships there are many more out there too.

-But to suggest that students who paid 17 times the normal rate had no other choice but to go to that private school is absolute BS. To have the head of the DE create his own definition of fraud, outside the justice system, is absolute BS. To then claim it is somehow Mr. and Mrs. Taxpayer’s problem is more BS.

-It is just like anything else. The median cost of a house in this country is $250K. Most people earn far less per year and you do have to subtract living costs to get to discretionary income. Since most people don’t have enough to buy the house with cash, they must make up the difference with debt. As long as they do that responsibly, and have enough income to pay off the debt, everything is fine.

-But when people make bad decisions with debt and then try to get other people to bail them out things are not fine. What we have to do is fix the system and hold people accountable for their own bad decisions. If there was fraud, let the courts sort it out. Remove the government from guaranteeing debt and/or making loans and the costs of college would not be artificially inflated in the first place.

-And @#71, I really don’t appreciate your snide comment about every student having to ay $20+ something a year. COA is no where near that where I live and BF covers a lot more than 1/5 where I live and excuse me for having common sense to not over pay and save and work hard not only for myself but my kids. Excuse me for having common sense. I wouldn’t pay 17 times what a commodity is worth and I would be dumb enough to believe whatever someone tells me about getting a job and I wouldn’t claim fraud later just because I am helpless. That is the point. I am not helpless and surely isn’t my job to bailout the people who think they are. It was the same sad story borrowers told not even 10 years ago in the credit crisis mess. It was the same bad decisions and reckless behavior.

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quote

[/quote]

So you choose to attend a more expensive school, and everyone else should contribute to your personal choice? hmmm

btw: what about two years at a juco, where a Pell does cover full cost, then two years at directional state U, where a Pell covers ~half. Add in a few loans, and voila, BA/BS with minimal debt. The point is that an education can be had on the cheap.

76

Calm down, blue bayou. You seem to be forgetting it is monopoly money. It really doesn’t matter. A few billion here, a few billion there, what’s the difference. You want nonsense look at post #5. Here, I’ll copy and past it:

The US budget is $3.5T, says Wikipedia. 3.5B represents 0.1% of that. I think we’ll be ok, financially.

There you go! It’s a small part of the US Budget so stop complaining. Let a few thousand people spend money like drunk sailors on shore leave you and I and the rest of the honest hard working people that tale care of their own pay for it. It’s our job to pay for it regardless of how dumb they are. It’s good for the economy!

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What happened to the responsible students who paid out of pocket instead of borrowing? Do they get reimbursed or is this another one of those “thank you for being responsible, you get nothing, taxpayer money is only for stupid, irresponsible people” kind of bailout, like the subprime loans?

Makes you wonder why anybody would want to be responsible about money in this country. We’re the suckers.

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I can’t tell if you’re serious. One obvious answer is that it’s generally [url=http://www.dol.gov/dol/topic/youthlabor/agerequirements.htm]illegal[/url] for children to work. We tried mangling our kids in coal mines and fabric factories and generally agreed that we should probably cut that out. Another obvious answer is that children don’t make any money. Certainly not enough to come close to a college education, even on the cheap.

@bluebayou: Yeah, pretty much. I could point out that not everyone has parents who will pay room and board while you attend that juco so you could do it on the cheap, or that there are plenty of students who are geographically limited and can’t just magic themselves close to a cheaper college, but why go that far? Colleges have massively inflated tuitions driven largely by taxpayer-funded programs backed by draconian lending law. I see no justifiable reason that we taxpayers shouldn’t have to bear the brunt of the college programs we created. If we don’t like it, and I surely don’t, then we should call on our legislators to change it, which is exactly what’s happening. That doesn’t do anything for those already in the system though. For them, yeah, lets go ahead and contribute to personal choices because we’ll all be better off when that college degree moves them into a higher tax bracket, they commit less crime, and they vote more intelligently.

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A generation ago, a high school graduate could have gotten a job that paid enough to be self-supporting without parental assistance (living in the parents’ house for free counts as parental assistance) and have something left over to pay the trivial tuition and book costs at a local community college or state university (and the latter were not that selective, so it was less likely then that a student was locked out of this option because the local state university was too selective). Maybe some really small student loans would have been needed in some cases.

But these days, high school graduate job opportunities are worse, while tuition (even at in-state public universities) is significantly higher, so it is significantly harder to do without parental assistance (including possibly living in the parents’ house for free).

80

^^^
I think you’re misreading cmsjmt’s post. Cmsjmt was asking whether CC students who paid their tuition in full would be reimbursed for those payments or if the only students being afforded relief were those who still had outstanding student loans.