The Corinthian 15: Ann, Natalie, Latonya, Mallory, Hollie, Paul,...

March 4, 2015 10:26 AM

...Natasha, Nathan, Jessica, Amanda, Ashlee, Deanda, Dawn, Makenzie, and Tasha. These are the names of the Corinthian 15, as signed to an open letter to the US Department of Education stating their refusal to repay their federal student loans. Their website includes a photo of each of the fifteen, and a brief story of each one's encounter with the for-profit Corinthian Colleges system, which is now being dismantled. (It operated colleges called Everest, Heald, and Wyotech.) Related stories from The Atlantic, Washington Post, The New Yorker, Consumerist, Inside Higher Ed, and Al Jazeera America.

The 15 former students' effort is being organized by Debt Collective, an offshoot of Strike Debt and Rolling Jubilee, which spun off from Occupy Wall Street. These were discussed on Metafilter in 2013 and 2012.

In September 2014, Strike Debt's Rolling Jubilee fund bought $3.8 million of Everest College student loans, for $106,709.48 (paying roughly 3 cents for every dollar owed). The loan portfolio had been sold to a debt buyer, who in turn sold the debt to Rolling Jubilee, who then forgave the loans outright.

That gesture related to private loans. The current strike relates to federal loans. The Department of Education and Consumer Financial Protection Bureau explain the difference between private and federal student loans.

In the former students' words:

Mallory - "I told the President that I wanted to withdraw. But she took me into an office and pressured me even further, insisting that I did not know my own mind. I refused to sign the form. But I was told that I could not withdraw. I wrote a letter of appeal, demanding a discharge of my debt. But my appeal was also denied. I was never given an adequate explanation."

Natasha - "Some Everest students were pulled out of class and told they could not return unless they signed loan paperwork."

Ashlee - "I filled out a single FAFSA form, and Everest College continually took out loans in my name without my knowledge."

Dawn - "They called me several times per week to convince me that I would be better able to provide for my kids if I earned a degree from their school."

Makenzie - "College was foreign territory for me. Neither of my parents attended, so I was on my own when it came to understanding how the system works."

Tasha - "To the Department of Education:... You let the scam continue for so long when the students could have avoided all of this debt with some notification from you.... Why are you, the Department of Education, collecting on these loans?... If somebody can't pay, if it gets to the point where you have to garnish wages and tax returns, maybe we should be funding higher education differently. You are now threatening to take food out of my children's mouths and possibly making my family and other families homeless."

The Corinthian Colleges website still displays photos of satisfied graduates and badges for being rated a top place to work for five years.

posted by Bentobox Humperdinck (35 comments total)

I feel like this won't go nearly as well for them as it did for the banks.
posted by leotrotsky at 10:41 AM on March 4, 2015 [23 favorites]

Yesyesyes. Thanks for posting this. I did not know about this and I am so inspired.
posted by rogerrogerwhatsyourrvectorvicto at 10:44 AM on March 4, 2015 [1 favorite]

My son, unfortunately, attended a Wyotech campus. On the up-side, he actually did get good training, especially upholstery and interior work. The down-side, of course, is he's saddled with a ridiculous amount of debt. And, he's never been able to find employment in the field, due to the double-whammy of the economy tanking just after he got out, and this being central Indiana, which is not a hot bed of custom car building, or even upholstery repair.

One interesting thing about attending Wyotech...Their "semesters" (or maybe the whole school year?) were a weird non-standard length. For whatever reason, because of this, Federal loans did not cover the entire duration, and he had to resort of private loans to make up the shortfall. I still don't understand it, obviously.
posted by Thorzdad at 10:45 AM on March 4, 2015 [1 favorite]

I feel like this won't go nearly as well for them as it did for the banks.

Too small to file?
posted by GenjiandProust at 10:48 AM on March 4, 2015 [10 favorites]

I have so many regrets over my private student loans and deciding to go to the school that I did. Yes I got an education that, 7 years after graduation, has finally landed me a full time job doing what I studied. I still have so much debt and I'm out of options like deferment and forbearance if I run into financial assistance before I manage to pay it off.

Please do not go to ITT Tech. Go to community colleges!
posted by royalsong at 10:49 AM on March 4, 2015 [9 favorites]

Ashlee and Mallory's stories sound like the college did things that were actually very illegal. The others sound exploitive, but not actually illegal.

I imagine the actually illegal stuff is pretty rare in this country... but I could be wrong.
posted by miyabo at 10:49 AM on March 4, 2015

Why were federal loans ever available to for-profit colleges? When did that happen?
posted by discopolo at 10:50 AM on March 4, 2015 [10 favorites]

Was everest the one that was giving out nursing degrees to people with absolutely no practical nursing training? If so yeah this whole company was sketchy as hell.
posted by vuron at 10:53 AM on March 4, 2015

One interesting thing about attending Wyotech...Their "semesters" (or maybe the whole school year?) were a weird non-standard length. For whatever reason, because of this, Federal loans did not cover the entire duration, and he had to resort of private loans to make up the shortfall. I still don't understand it, obviously.

I believe that was by design - to soak the students for more money ..
posted by k5.user at 10:53 AM on March 4, 2015 [3 favorites]

When did that happen?

About the same time that the for-profit colleges realized that congressmen like money.
posted by Navelgazer at 10:54 AM on March 4, 2015 [21 favorites]

Well, I think there were actually some good for-profit vocational programs at one point, dating back to the 19th century. And there are even for-profit medical schools and law schools, which presumably maintain roughly the same quality standards as their nonprofit counterparts. People who attend those should have the same access to federal loans.

What should be illegal are loans to the giant, extremely predatory for-profit college corporations that strongly incentivize their employees to lie to and manipulate students.
posted by miyabo at 10:54 AM on March 4, 2015 [3 favorites]

Fantastic post - thank you.
posted by rtha at 10:55 AM on March 4, 2015

There are all sorts of industries in which the federal government and capitalists connive to exploit poor, desperate, or ignorant people. Post-secondary education in America is one of the worst examples of this immoral alliance.

That said, these students' remedy is to sue the school (and any other entities) for fraud. Why are they entitled to shift the consequences of their decisions onto their lenders, whether public or private? If their banks lied to them, then sue those banks. It's wrong for the banks to be permitted to shift their losses onto the people, and it's wrong for these students to try to shift their losses onto the people.
posted by resurrexit at 10:57 AM on March 4, 2015

I met someone here in the DMV area who decided that a bachelors from the notorious Full Sail University was the way to go. Never mind that there are some really good and inexpensive CCs with web design programs to start at that had transfer agreements with UMD and other schools. Never mind a Google search showing how overpriced it is or how grads with crushing debt are suing the school...I'm not a web designer but it seemed like a pretty bad investment.
posted by discopolo at 10:57 AM on March 4, 2015

The others sound exploitive, but not actually illegal.

I like to think that in a country that gave a shit, those would be the same thing. This is obviously not that country.
posted by Steely-eyed Missile Man at 10:59 AM on March 4, 2015 [12 favorites]

"..and it's wrong for these students to try to shift their losses onto the people."

Not if we finally rediscover the concept of usury. It was really a thing before free market forces banished it from common usage.
posted by klarck at 11:01 AM on March 4, 2015 [17 favorites]

Please do not go to ITT Tech. Go to community colleges!


I have a much older cousin who went to DeVry after dropping out of the local state college. He's doing pretty well for himself, it seems. I also saw DeVry (didn't know it was so old!) sponsoring one of the "This is Your Life" shows!
posted by discopolo at 11:02 AM on March 4, 2015

Last Week Tonight on the subject.
posted by Navelgazer at 11:19 AM on March 4, 2015 [3 favorites]

Why are they entitled to shift the consequences of their decisions onto their lenders, whether public or private? If their banks lied to them, then sue those banks.

The lenders (public or private), made the decision to extend unsecured loans; losing their money is one of the predictable consequences of this decision. If their borrowers default, then sue those borrowers.
posted by melissasaurus at 11:21 AM on March 4, 2015 [2 favorites]

I spent about six months arguing the case for my brother to not go to WyoTech and go to a nearby community college instead. When he wanted to go I read up on it - this was mid oughts - and something about it seemed really off but I couldn't quite put my finger on it, though I had a few areas to point to like credits not being able to transfer, the scheduling, and their failures to really publish anything in non-market speak about job placement rates.

It caused a huge family rift. My brother wanted to go for the appeal of not doing "English classes" and the like, but I suspect deep down it was because of how easy it was get in. (My parents wanted him to go because college had "caused" his big sister to "betray her roots, way of life, and the way she was raised" by turning into a Liberal.) These are probably pretty common reasons these schools appeal to people. I eventually wore everyone down because I'm a stubborn asshole of the arguments about cost and ease of transfer credit - he could get the same technical degree nearby for about 1/3 of the cost. So I'm definitely forwarding this to everyone with a thank you for making the right choice.

But what struck me through the whole process was how much their system was designed to take thorough advantage of people who didn't have mentors or counselors that had been through the college system before and knew how it should work. It's really scary if you don't have any guidance no matter where you go; the CC designers knew it and set up a system specifically to profit from fear.
posted by barchan at 11:22 AM on March 4, 2015 [22 favorites]

That said, these students' remedy is to sue the school (and any other entities) for fraud.

Any lawyers out there interested in a civil suit for customers against a bankrupt commercial service provider? What? No? Oh well, guess there's nothing to be done.

Why are they entitled to shift the consequences of their decisions onto their lenders, whether public or private? If their banks lied to them, then sue those banks. It's wrong for the banks to be permitted to shift their losses onto the people, and it's wrong for these students to try to shift their losses onto the people.

Places like Corinthian exist to skim federal loan money. If you look at that in reverse, they also serve to generate federal loans, much like a thousand sketchy mortgage lenders existed to generate subprime loans. The lenders are and were practically culpable, legally? Well... LOL.
posted by ennui.bz at 11:23 AM on March 4, 2015 [12 favorites]

This whole thing is exactly like the heath care crisis. Why are we focusing so much on how to repay back tons of money, instead of on why these things cost tons of money in the first place?
posted by Melismata at 11:26 AM on March 4, 2015 [18 favorites]

One interesting thing about attending Wyotech...Their "semesters" (or maybe the whole school year?) were a weird non-standard length. For whatever reason, because of this, Federal loans did not cover the entire duration, and he had to resort of private loans to make up the shortfall. I still don't understand it, obviously.

Sounds like a non-term academic year schedule, something like 8 or 9 classes spread out over 40-50 weeks. To receive Title IV funding (pell grant, stafford loans) you have to have at least 30 weeks of educational instruction. If you structure your program to have only 30 or so weeks of classes in an academic year, you're going to have to do more to justify your high costs. But if you have 50 weeks worth of classes in your academic year then your tuition is understandably higher and students will be forced to use more of that sweet sweet guaranteed government money.
posted by GrapeApiary at 11:27 AM on March 4, 2015

> That said, these students' remedy is to sue the school (and any other entities) for fraud. Why are they entitled to shift the consequences of their decisions onto their lenders, whether public or private?

As a rational person you're probably aware that this would likely be impossible for these debt-laden, unemployed individuals to do.

And Corinthian is already collapsing under lawsuits. It's a near-certainly that if these fifteen people did eventually win such a suit, they'd collect nothing. No rational lawyer would start a class-action suit against them, since there will be no cash there at the end.

So your answer is, basically, "You got ripped off and you are still paying for it and will pay for it for decades, and there's no legal way out - suck it up." That is, simply, not good enough.

Ethically, this whole thing is one great fraud from beginning to end. The bankers, by loaning money against these bogus educations from bogus institutions, are active and willing participants in this fraud. The legal system is so arranged as to completely shield the bankster, without whom none of this would be possible, from the consequences of their unethical actions - and it looks as if the people who ran Corinthian, systematically robbing people of their time and their money, literally robbing them of their futures - might escape without jail time, no doubt to go on and do it again.

What they are doing - banding together and getting publicity for the shoddy tricks pulled on them by civil disobedience - is admirable and I salute them and wish them all the very best (and am now looking for some place to contribute to their legal defense fund).
posted by lupus_yonderboy at 11:44 AM on March 4, 2015 [35 favorites]

I work at a small (not-for-profit!) university with a lot of first-generation students, and it is an issue that we are very wary of.

Almost ten years ago now, just before the economy imploded, our Admissions department raised their standards in order to not accept students who seemed on the brink of not graduating. They did so because it was such a disservice to the students and their family (and ohbytheway to the university itself, because we had to go recruit a transfer student to fill their spot) to leave them broke and in debt and with shattered dreams.

It can be seen as pretty self-serving, but it also avoided doing harm to a lot of kids -- 10% of the incoming class, if memory serves.
posted by wenestvedt at 12:19 PM on March 4, 2015 [1 favorite]

I just want to emphasize something I don't think I made clear enough in the original post. The loan holder for these specific loans is not a bank; it is the Department of Education itself, an agency of the US federal government. Here is a place on the Department of Education's website where it explains that it does hold some student loans, hire collection agencies to collect the payments, and order employers to garnish wages of borrowers in default.
posted by Bentobox Humperdinck at 12:23 PM on March 4, 2015 [6 favorites]

The problem isn't the concept of for-profit schools. The problem is the total lack of regulation of these schools -- even when you are getting loans that will never, ever disappear.
posted by jeather at 12:29 PM on March 4, 2015 [6 favorites]

Great post.

Everest College still has ads all over the TV here in the Chicago area, especially during the daytime.
posted by SisterHavana at 2:10 PM on March 4, 2015 [1 favorite]

That said, these students' remedy is to sue the school (and any other entities) for fraud.

That said, these students' remedy is to cut off their own limbs, don sackcloth and ashes, and spend the rest of their lives in shackles. QED.
posted by blucevalo at 2:25 PM on March 4, 2015 [4 favorites]

Not to diminish the struggles of these students but the names of these institutions are pretty ironical. Corinth, the home of Sisyphus. Everest, the mountain few summit and fewer return alive from.
posted by DeepSeaHaggis at 2:37 PM on March 4, 2015 [8 favorites]

Almost ten years ago now, just before the economy imploded, our Admissions department raised their standards in order to not accept students who seemed on the brink of not graduating. They did so because it was such a disservice to the students and their family (and ohbytheway to the university itself, because we had to go recruit a transfer student to fill their spot) to leave them broke and in debt and with shattered dreams.

Was it really so altruistic or were they gaming the six year graduation rate? Where I was a grad student, there was a convenient "restructuring" a few years before I got there that abolished most of the services supporting students who were less-prepared for college despite being able students. Students graduated, albeit more slowly than the average. Raise the six year graduation rate, rise in the US News rankings, get more out-of-state students and tuition money, who cares if you're throwing away access for disadvantaged students to the flagship state university.
posted by hoyland at 3:52 PM on March 4, 2015 [1 favorite]

Many of these students who are getting taken to the cleaners are veterans, who are specifically targeted by the for-profit colleges because they get guaranteed loans through the GI Bill. The for-profit colleges lobby heavily, IIRC, in order to continue the flow of federal dollars, but don't do much to actually help the veterans they talk into enrolling.
posted by suelac at 4:02 PM on March 4, 2015 [7 favorites]

I hope the focus isn't just on for-profit status but rather on regulating the terms for student loans, GI Bill, etc. because the scammers are already working on ways to turn a profit by milking non-profit status using the same shell company tricks which are familiar to anyone following the charter-school movement.
posted by adamsc at 5:11 PM on March 4, 2015 [4 favorites]

There must be good and ethical for-profit schools out there, but they are wildly overshadowed by the legion of exploitative and extractive places preying on underinformed people. I'd love to see some prosecutions and jail time for the worst offenders.
posted by Dip Flash at 6:41 PM on March 4, 2015 [1 favorite]

a) nice post. great info here.
b) it's wrong for these students to try to shift their losses onto the people. Like AIG?
posted by j_curiouser at 11:06 PM on March 4, 2015