In today’s economic climate, student loan debt is one of the hardest debts to deal with, and that’s assuming that you’re able to complete your college education without facing any mitigating circumstances. Unfortunately, for thousands of students across for-profit Corinthian College campuses, that’s no longer an option. On the first Monday of May, Corinthian Colleges Inc. filed for chapter 11 bankruptcy protection, ending the largest shutdown of a for-profit college ever seen with over $140 million in debt and multiple active lawsuits.
Facing a $30 million fine from the U.S. Department of Education for deceptive practices and declaring only $19 million in assets at the time of filing, Corinthian may feel that there was no choice but to declare bankruptcy. But where does this leave Corinthian’s students, now lacking not only a learning opportunity for which many paid top dollar, but also facing massive student debt with nothing to show for it?
A recent MarketWatch report notes that many students are seeking legal action against the college, even in the face of bankruptcy. Bankruptcy protection is designed to stop any legal action against the party filing, but the former students of Corinthian Colleges hope that their suit will fall under one of the rare exceptions to the rule. These former students are seeking reparations not in the form of a cash payout, of course, but rather the opportunity to continue their education elsewhere, debt forgiveness and other various forms of relief from the predicament in which the shutdown left them.
Of course, this isn’t the first time a for-profit college has shut down. Collin’s College of southern Arizona stopped taking applications in 2012, after eliminating three of their degree programs in 2009. According to a CNN opinion piece, these practices should come as no surprise facing the growing opposition against for-profit colleges. While less than 15 percent of students in the United States attend these for-profit institutions, close to 50 percent of all student loan defaults come from their former students. With students unable to continue their education—the likelihood of being able to progress to a Master’s degree following a Bachelor’s obtained at one of these colleges is slim to none—and unable to get a job in their chosen field thanks to low standards and poor training, colleges like Corinthian are in the line of fire from professionals in the fields of education, finances and law, as well as current students, prospective students, other colleges and even the federal government.
So how are you supposed to protect yourself if this happens to you? Speak to your financial advisor before enrolling in any form of higher education; make sure that your college of choice offers transferrable credits, isn’t currently fighting off any major lawsuits and has a high rate of satisfaction from alumni. You should also make sure that your financial aid is obtained at the right time and through the right methods, so seek out grants before loans, and loans that give you exactly what you need and no more. While it may seem fun to live the high life your first year or two of college, remember that student loans need to be paid back eventually. Keep your finances in check with the help of your professional advisors, and choose a college that won’t let you down.
Just like finding a college you can trust is integral to your future, so is choosing a financial team that won’t let you down. If you’re one of thousands who is dealing with mounting student loan debt, or coming to terms with the fact that—like Corinthian Colleges—there’s no option but to file for chapter 11 bankruptcy, you have a friend with Van Horn Law Group. Get the help you need from a team you can trust, no matter what financial burden you’re carrying.