By JOSE MEDINA / Contributing writer
In 2012, Tiffany Johnson enrolled as a first-time college student at Heald College. The school guaranteed her a high-paying job and successful career upon graduation, which could be in “as little as nine months,” according to advertising. Three years later, Tiffany faces $37,000 in student loans and has no degree to show for her time, effort and debt. She is one of thousands of students with similar stories, who were taken advantage of by the illicit practices of some for-profit colleges.
The announcement this week that Westwood College will close four California campuses marks the latest in a series of closures of for-profit schools. In July, Four-D College unlawfully closed two California campuses. In April, Corinthian Colleges abruptly ceased operations at all Heald, Everest and WyoTech campuses, including 23 in California. These closures followed investigations and enforcement actions by state and federal agencies.
An estimated 1,800 students are enrolled at the California campuses of Westwood Colleges facing closure. Approximately 600 students were enrolled at Four-D at the time of closure, and California had 13,000 students enrolled in Corinthian institutions at the time of closure. The California Department of Veterans Affairs also suspended Corinthian’s participation in veteran student aid programs for another 1,100 California veterans enrolled through August 2014.
Many of these students, like Tiffany, were harmed by illegal and deceptive practices. Many remain overwhelmed with debt – the federal loan debt of California Corinthian students alone exceeds $300 million. Students forced to default on federal loans, either because they could not graduate or because their degree is of questionable quality, face severe lifelong consequences. The government can offset Social Security benefits, seize tax refunds and garnish wages. Students with defaulted federal loans lose eligibility for federal financial aid and have serious damage to their credit histories.
In recognizing that an unlawful school closure affects a student’s ability to repay federal loans, the U.S. Department of Education provides “closed school” loan discharge options, so long as students do not transfer any credits earned at the closed school. Additionally, due to findings of widespread fraud and abuse at Corinthian, the Department of Education is expanding “defense to repayment” loan discharge options for students who can prove they were defrauded.
For students to access this debt relief, however, they must be able to navigate the complicated and flawed application process. According to a letter from the attorney generals of 12 states, successfully applying for “defense to repayment” loan forgiveness would “require an understanding of contract, tort or unfair practices statutes” – skills and knowledge inaccessible to most students. According to recent testimony provided by staff from the Bureau for Private Postsecondary Education, the California agency responsible for assisting for-profit college students affected by an unlawful school closure, Corinthian students who have contacted the bureau have largely needed assistance in order to secure even a “closed school” loan discharge. The bureau currently has one employee responsible for assisting the thousands of California students potentially eligible for loan forgiveness and tuition recovery.
Following the closure of Corinthian, the California Legislature acted swiftly to provide a reasonable remedy through Assembly Bill 573. It would have provided $1.3 million in legal assistance grants to help students with the loan forgiveness process. It also would have restored California education grant eligibility by providing up to two years of restoration in the Cal Grant and California National Guard Educational Assistance programs.
AB573 had broad, bipartisan support. Although sympathetic, Gov. Jerry Brown vetoed it, arguing that student access to the federal loan forgiveness process is sufficient, despite significant evidence to the contrary.
The announcement from Westwood Colleges highlights the importance of supporting students facing a college closure. Helping California students revoke their student loan debt and obtain tuition recovery is good for these students, costs very little to the state of California and provides benefits, now and in the future, to California’s economy. Not to mention, it is the right thing to do.