Over 100 students from a now-defunct college are refusing to pay their student loans, according to CNN Money. The students are reportedly taking their refusals straight to the federal government to request the relief of their past debt.
AN UNCOMMON SCENARIO FOR STUDENTS SEEKING DEBT RELIEF
In most cases, a situation involving a student that refuses to pay their federal student loan debt would likely not end well for the actual student. Keep in mind that these federal loans cannot even be erased with an approved bankruptcy. However, these “debt strikers” could actually have their wishes granted simply because of the school that they attended – Corinthian College.
Corinthian Colleges, Inc. was once known as one of the largest post-secondary, for-profit education companies in North America. With over 100 locations throughout the United States and Canada, these schools offered students degree programs and career-oriented diplomas in a number of different areas – including criminal justice, business, and healthcare and information technology. However, their track record of apparent success came to a screeching halt with a major lawsuit filed in 2014.
The Lawsuit That Makes Relief Possible
In September of 2014, the Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Corinthian College for its illegal predatory lending scheme. The CFPB alleged that the institution used phony job offers and career services to persuade tens of thousands of students to take out private loans to cover their educational expenses and tuition costs, according to Consumer Finance.
One of the phony scams allegedly offered by the school was the promising career options that Corinthian College students would be able to choose from when they received a degree. The information that they did not disclose to their students was that they defined a “career” as a job that would only last one day with a promise for a second day. The school also offered bogus job placement rates and “career services” that were actually just Craigslist job postings. The school even went as far as paying employers to hire their students for temporary jobs.
A $480 Million Verdict
In February, many former Corinthian College students might have jumped for joy when the U.S. Department of Education and the CFPB made a big announcement. Over $480 million in forgiveness would be offered to the students that borrowed money from the high-price private loans offered by the now-defunct school.
The ECMC Group now owns numerous Corinthian schools, but has been ordered to not operate any type of private student loan program for their students for seven years.
Meanwhile, the “debt strikers” that refuse to pay their past student loans may actually receive the relief that they desire simply because of the $480 million verdict. In addition to having their debt relieved, according to Consumer Finance, any negative information reflected on the students’ respective credit reports regarding that debt would also be eliminated. It might not be a very common scenario for students to refuse to pay student loans and get away with it. However, the “debt strikers” that went to Corinthian College could very well set a new precedent in that regard.
If you’re a student seeking debt relief you have a friend in Van Horn Law Group. We are here to help.