College Student Loans and Forgiveness

Massachusetts Democrat Senator Elizabeth Warren is upset that the Government is not forgiving some college students their student loans.

The AP is reporting that the other day Senator Warren was very angry at the United States Education Department for moving forward on attempt to collect college student loans from approximately 80,000 former student of Corinthian Colleges nationwide.  She is angry because the federal and state government found that the now defunct for profit chain of schools defrauded students.

Senator Warren sent a letter to Education Secretary John B. King Jr. stating:

It is unconscionable that instead of helping these borrowers, vast numbers of Corinthian victims are currently being hounded by the Department’s debt collectors. Many having their credit slammed, their tax refunds seized, their Social Security and Earned Income Tax Credit (EITC) payments reduced, or their wages garnished — all to pay fraudulent debts that … are likely eligible for discharge.

What is an organization supposed to do when they lent money to someone and they are not being paid back?  I feel for those students but it was the students who asked to borrow the money and because of that what responsibility does the student then have?

Is this not another slippery sloop we are heading down when we advocate for loan forgiveness for anyone who may have been scammed?  What next, we start advocating for home and auto loans to be forgiven and the taxpayer pays for the loan of those home or auto buyers?

In response, to Senator Warren’s letter the Education Secretary John B. King said:

“it’s worth pointing out that some of those students attended programs where there were findings of fraud. Others did not.”

Senator Warren asked the Education department to “immediately halt all collections on Corinthian students’ debt and discharge their federal loans”.

The AP article states that back in 2011 “a whistleblower raised concerns about the Corinthian College company, alleging that employees of Corinthian fabricated employers to make it appear as though unemployed graduates had secured good jobs in their careers of study”.

In June 2015, the Education department appointed a “special master” to help former students of Corinthian colleges to request loan forgiveness from the U.S. Taxpayers.

According to the most recent report from the department, it has received more than 23,000 Corinthian claims for “borrower defense” relief, where students allege they were defrauded by the school. Of those 23,000 requests about 3,800 have been approved for loan forgiveness totaling more than $73 million.

Again the question must be asked at what point to people take responsibility for their actions even if their actions were not criminal in nature.

What else does the American taxpayer have to take it on the chin for?

Let’s talk about this today on The Live with Renk Show which airs Monday through Friday 9 a.m. to noon. To let me know your thoughts during the show please call (269) 441-9595.