Today, Congresswoman Maxine Waters (D-CA-43), Ranking Member of the Financial Services Committee, expressed support for the Consumer Financial Protection Bureau's announcement that it would take legal action against Corinthian Colleges, Inc. for its predatory lending practices.
Upon hearing the news, Rep. Waters reiterated her support for an unqualified ability for all students enrolled at Corinthian to withdraw and receive a refund. Currently, unqualified refunds are only provided to a small group of students, as required under an agreement with the Department of Education.
"Now more than ever, these students need access to relief beyond what was provided them under Corinthian’s agreement with the Department of Education,” Waters said. “Every student should be able to withdraw and receive a refund from their Corinthian school; and if their school closes, they should all immediately receive a federal loan discharge to wipe out their debt.”
Congresswoman Waters has been a longtime critic of predatory practices among some of the nation’s for-profit colleges, especially on the issue of gainful employment. In a letter to Education Secretary Arne Duncan in July 2014, Waters demanded universal access to refunds and urged the Department of Education to make Corinthian bear most of the cost of those refunds. Waters also announced legislation last week that would allow distressed private education loan borrowers to rehabilitate their credit. According to the Department of Education’s Office of Federal Student Aid, nearly 40 percent of Corinthian students have defaulted on their loans since 2008.
“I applaud the Consumer Financial Protection Bureau and Director Richard Cordray for taking meaningful action on behalf of Corinthian students,” Waters concluded. “Having worked on this issue for over 20 years, including as a California Assemblywoman long before coming to DC, it is heartening to see federal support for regulations I fought for long ago. Corinthian Colleges has long deceived students into assuming crushing amounts of debt by misrepresenting their job placement numbers and the strength of their programs, all while receiving up to 90 percent of their revenues from the federal government. It is time regulators stepped up and began to provide real unequivocal relief to students harmed by for-profit schools, especially through strong rules for gainful employment and by limiting the role of taxpayer funds in these deceptive practices. Had strict gainful employment standards been applicable to Corinthian programs, this situation may have been avoided. It is my sincere hope that the CFPB’s enforcement action today will send a message to other predatory institutions and their boards that these unscrupulous and harmful practices will not escape federal scrutiny. Moreover, I hope this action makes clear to students that they now have an advocate in the Consumer Financial Protection Bureau.”