Last November, Latonya Suggs, a 28-year-old Cincinnati woman with an infant son, went to a hotel ballroom in Southern California and told two of the federal government’s top education officials that the U.S. Department of Education had failed her.
The previous month, Suggs had graduated from Everest University, a for-profit college, with a degree in criminal justice. Her online program, one of many owned by Corinthian Colleges Inc., saddled her with more than $70,000 in debt. She had hoped the degree would lead to a career as a probation officer. Instead, she could only find work as a hotel housekeeper, she told Education Undersecretary Ted Mitchell and Deputy Assistant Secretary Lynn Mahaffie, according to a transcript of the event. Suggs is now unemployed.
Corinthian, once one of the nation’s largest for-profit college chains with more than 110,000 students, is effectively shutting down under the weight of numerous state and federal probes that allege it cheated students by lying to them about job placement and graduation rates. Though the chain has previously disputed allegations from state and federal authorities that it defrauded students, it recently sold more than 50 campuses under pressure from the U.S. Department of Education, and Canadian authorities last week forced another 14 into bankruptcy.
A contingent of former students, backed by prominent student advocates, the Massachusetts attorney general and more than a dozen Senate Democrats, has demanded the Education Department forgive federal student loans that thousands of people took out to attend Corinthian’s schools. The department has the authority to cancel loans in instances where students demonstrate that schools defrauded them. Lawyers from the Department of Justice have argued that Education Secretary Arne Duncan has “complete discretion” when it comes to canceling loans for all students at a particular institution if he determines it defrauded students, even absent a formal application from individual borrowers.
But in the case of Corinthian, the Education Department has done almost everything it can to avoid forgiving any taxpayer-backed debt incurred by current and former Corinthian students.
In response, Suggs and 14 other former Corinthian students announced on Monday that they will not repay any federal student loans they took out to attend Corinthian’s schools. They’re calling it a debt strike.
“The Department of Education allowed this to happen,” Suggs said Monday about her experience at Everest and subsequent struggle to find work. “It’s their responsibility to make sure these schools hold up their end of the bargain. If they kept up their promises, I’d pay it back. But they haven’t done anything, so why should I pay?”
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Earlier this month, the new buyer of more than 50 former Corinthian schools announced that current students enrolled in their criminal justice programs would be given a full refund upon request.
The program was among many that had “failed to keep pace with workforce demands and that have consistently fallen short of meeting baseline standards for job placement,” according to Zenith Education Group, an arm of debt collector and Education Department contractor ECMC Group.
Suggs is the kind of student the Education Department had tried to protect in keeping Corinthian’s schools open. While student advocates urged the department to allow the schools to shut down, which would give Corinthian students the opportunity to get their federal loans cancelled, Education Undersecretary Ted Mitchell defended the department-brokered sale to Zenith by arguing that the plan would allow students to finish programs “that they have worked so hard to obtain.”
“This sale … will avoid disruption and displacement for tens of thousands of students — approximately 22 percent of whom are within 3 months of graduating,” Mitchell said in December.
Suggs graduated in October, making her ineligible for Zenith’s refund option. She said that had she been given the option, she would’ve taken the refund and had it applied in full to the federal student loans she took out to attend classes at Corinthian.
Instead, she said, she’s stuck fighting an Education Department that refuses to acknowledge its mistakes.
