Sacramento, California - California Attorney General Xavier Becerra, leading a coalition of eight states, has filed an amicus brief in support of students defrauded by Corinthian Colleges (Corinthian). The brief, filed in the Calvillo Manriquez v. DeVos case in the U.S. Court of Appeals for the Ninth Circuit, supports a district court’s order halting the U.S. Department of Education (Department) from its practice of giving only partial relief to defrauded students. The Department has been granting as little as 10 percent loan relief to students who attended the now-defunct, predatory, for-profit Corinthian.
The Department has appealed the court’s decision. Attorney General Becerra has a pending, related action against the Department and its Secretary.
“Students defrauded by the predatory Corinthian Colleges deserve full and total relief from the Department of Education,” said Attorney General Becerra. “These students were already cheated out of their education by Corinthian, and now the Department of Education is cheating them again. Betsy DeVos should be fighting for our students, not doing the bidding of for-profit colleges. At the California Department of Justice, we’ll continue fighting to get these students the full relief they deserve.”
Corinthian intentionally targeted low-income, vulnerable individuals through deceptive practices and false advertising that misrepresented job placement rates and school programs, among other egregious misconduct. In 2013, the California Attorney General’s Office (Cal AGO) led the charge against Corinthian, seeking to put an end to abusive practices that left students with large amounts of debt and without the jobs Corinthian had falsely promised its degrees would provide. The Cal AGO obtained a $1.1 billion judgement against Corinthian on March 26, 2016, and worked with the Obama Administration to ensure that tens of thousands of former Corinthian students are entitled to federal student loan relief. Subsequently, the Cal AGO, as the primary negotiator representing the interests of state attorneys general, worked with the Department of Education to enact new regulations and improve the loan forgiveness process for students defrauded by their schools. This process ultimately led to the development of the Obama Administration’s Borrower Defense Rule.
However, recent actions by the Department have made it immensely difficult for students to seek relief. In 2017, under current Secretary Betsy DeVos, the Department abruptly halted approval of all borrower defense claims. On December 2017, Attorney General Becerra sued the Department for failing to expeditiously grant full relief to student borrowers with pending Corinthian borrower defense claims. Soon thereafter, the Department announced it would implement a new policy granting only partial relief to these borrowers. The Calvillo Manriquez suit challenged this partial relief policy and sought an injunction from the District Court to halt it. By granting the preliminary injunction, the District Court halted the Department from carrying out its illegal attempt to shortchange defrauded Corinthian students. The District Court also halted collection efforts on federal direct student loans originating from Corinthian’s fraud.
Attorney General Becerra has defended defrauded student borrowers and the Borrower Defense Rule at every turn:
- On July 6, 2017, he joined a coalition of 19 state attorneys general in filing a lawsuit against the Department of Education for unlawfully delaying the implementation of the Rule.
- On July 13, 2017, he joined a coalition of 21 state attorneys general in criticizing the Department for proposing a new rulemaking process to replace the Rule.
- On March 5, 2018, he led a coalition of 20 state attorneys general in submitting a letter to the Department opposing the proposals it offered during its rulemaking sessions to redraft regulations on borrower defense.
- On August 30, 2018, he led a coalition of 21 attorneys general to submit a comment letter sharply rebuking the Department’s proposed changes to borrower defense regulations.
