| WASHINGTON, June 6
WASHINGTON, June 6 The U.S. Education Department
has left thousands of student-loan borrowers who were defrauded
by Corinthian Colleges Inc in limbo by prolonging a process
created by the Obama administration that was supposed to
speedily cancel their debts, according to 20 state attorneys
general and regulators.
In the final months that President Barack Obama, a Democrat,
was in office the department finalized a regulation easing the
way for students from struggling for-profit colleges such as
Corinthian and ITT Tech to quickly receive debt relief that they
were entitled to by law.
In a letter sent on Monday to U.S. Education Secretary Betsy
DeVos, the state attorneys general said they were concerned
about growing backlogs of applications for the relief and of
loans approved for discharge that simply need a sign-off. The
letter, signed by the top lawyers of Illinois, California,
Massachusetts and other states, was released on Tuesday.
They said they were particularly troubled that some
borrowers had been notified their loans were eligible for fast
discharge under the regulation but that the cancellation has not
yet happened. According to the letter, the Department stated in
January it had notified 23,000 borrowers that their loan
forgiveness should be complete within the 60 to 120 days, but in
many cases loans have not been canceled.
That means some of Corinthian's students could still be on
the hook for monthly payments or possibly face debt collection.
Work on discharging loans that have been approved is
underway, according to Education Department Press Secretary Liz
"We are working with servicers to get these loans discharged
as expeditiously as possible," Hill said in a statement. "Some
borrowers should expect to obtain discharges within the next few
Virginia Attorney General Mark Herring said about 5,000 past
Corinthian students in the state received letters last December
directing to apply on-line for relief. Since then, his office
has received queries about delays in the process.
"Delay in canceling this debt, especially for students who
have already been approved, could put even greater financial
strain on students in Virginia and around the country," he said
in a statement.
Amid federal and state investigations in 2015 into its
post-graduation rates, for-profit Corinthian filed for
bankruptcy and abruptly closed its 28 schools.
(Reporting by Lisa Lambert; editing by Diane Craft)