Biden delivers relief to those defrauded by Corinthian Colleges

There have been plenty of controversies in the world of for-profit education, but Corinthian Colleges stood out — and not in a good way. When the operation collapsed in 2015, MSNBC reported that it was “the biggest shutdown in the history of higher education in the United States.” The Associated Press added this morning that the Corinthian Colleges venture also represents “one of the most notorious cases of fraud in American higher education.”

It’s against this backdrop that President Joe Biden is offering relief to the business’ former students. NBC News reported overnight on the Democratic administration canceling $5.8 billion in federal student loans for millions of thousands of students who attended schools affiliated with Corinthian Colleges.

The action will erase debt for about 560,000 borrowers who enrolled in the for-profit Everest, Heald and WyoTech colleges, which Corinthian owned or operated before it folded in 2015 following an investigation by the Education Department. Borrowers do not need to take any action to have their loans forgiven, the agency said.

It appears to be the US Department of Education’s largest ever student loan forgiveness initiative.

This is also of particular interest to Vice President Kamala Harris: As California’s attorney general, Harris filed suit against Corinthian, contributing to the operation going out of business.

For those unfamiliar with the controversy, it’s a rather ugly story. Corinthian was accused by federal officials of, among other things, misrepresenting job placement data, altering grades, and manipulating attendance records, all as part of a scheme to deceive its students.

The AP’s report added, “Hundreds of students told investigators they were pressured to enroll with promises of lucrative employment, only to end up with huge sums of debt and few job prospects. Federal officials also found that the company falsely told students their course credits could be transferred to other colleges.”

Facing fines, fraud allegations, and multiple investigations, the company shut down in 2015, leaving thousands of students in the lurch. Now, finally, they’ll get some relief.

But as the dust settles, let’s not overlook the fact that the Corinthian Colleges operation was not without political allies. In fact, Bloomberg News reported seven years ago that Republican Sen. Marco Rubio of Florida seemed to take a special interest in the business, and even urged the Obama administration to go easy on the company that had defrauded so many.

[In the summer of 2014]Senator Marco Rubio of Florida asked the US Department of Education to “demonstrate leniency” toward Corinthian Colleges by permitting the wealthy for-profit company to continue accessing millions of dollars in federal financial aid while it was cooperating with a federal investigation. […] The top-tier Republican presidential candidate had made his plea in a letter — obtained by Bloomberg Politics — dated June 20, 2014 and addressed to Jim Shelton, the deputy secretary of education, and Ted Mitchell, the undersecretary for post-secondary education.

As we discussed soon after, Rubio’s letter argued that the Obama administration “can and should demonstrate leniency” towards Corinthian, despite the allegations of fraud. The same letter also complained about federal investigators placing “extreme financial constraints” on Corinthian, restricting the company’s “timely access to federal financial aid.”

The Florida Republican was apparently concerned about the mean ol’ Obama administration treating this fraudulent business too harshly.

It’s difficult to say why, exactly, Rubio went to bat for Corinthian — the venture’s political action committee donated $5,000 to the senator, though that’s a modest sum by today’s campaign-finance standards — but the Bloomberg News report suggested the Republican’s ideology likely had something to do with it.

“Rubio is a noted supporter of ‘alternative’ forms of higher education,” the article noted, adding, “In 2014, he introduced legislation to encourage federal agencies to hire people with ‘alternative educational experience.’”

Seven years later, as a Democratic White House delivers for Corinthian’s former students, the Floridian hasn’t yet commented publicly on the latest developments.

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