In the wake of the collapse of Corinthian Colleges (parent company to Everest, Wyotech and Heald brand schools), Corinthian students will have a hard time getting straight answers about their rights and options. Unfortunately, under the agreement between Corinthian and the Department of Education, the Department has ceded responsibility for explaining students’ rights and options to Corinthian. More troubling, Corinthian will be in the position to decide whether students who enrolled before June 23, 2014, will receive a refund or be required to complete their programs. Where else may Corinthian students go for advice? Although some legal services organizations may be able to provide help, many have recently experienced severe federal budget cuts. The Department, however, did not require Corinthian to provide any funding for student legal assistance.
Below, we provide some answers for students about their options under the Corinthian/Department agreement and federal student loan cancellation rights. Students should be aware that they may also have rights with respect to private student loans or state student protection funds. These rights depend on state law and the terms of the private loan contracts.
Information for Closing (Teach-Out) School Students
- We focus here on your eligibility for a closed school discharge of your federal loans. But, even if you aren’t eligible for a closed school discharge, you should look into whether you qualify for relief from other federal loan discharge programs or state student protection programs.
- What are Teach-Outs? Teach-outs are arrangements through which either Corinthian or another school provides ongoing instruction so that students are able to complete their programs. Teach-outs may not be appropriate for all students.
- Meeting with Director of Education:
- Every closing school student will be required to meet with the Director of Education at his/her campus to discuss whether the student will participate in a teach-out or receive a refund of all amounts paid directly to Corinthian.
- This refund will not include amounts borrowed to pay for living expenses, transportation expenses, or other non-educational expenses. For students who borrowed to cover these types of expenses, Corinthian will not provide complete student loan refunds. Corinthian will only refund tuition, fees, and other education-related expenses paid directly to Corinthian.
- The Director is not required to inform students about their potential right to the cancellation of their federal loans (this is called a closed school discharge).
- Options for Students Enrolled After June 23:
- These students will have the right to choose a refund or to participate in a teach-out.
- If a Director pressures these students to participate in a teach-out, they should file a complaint with their state attorney general and state oversight agency.
- Options for Students Enrolled Before June 23:
- These students will have no choice. Corinthian will decide whether they will receive a refund or be expected to participate in a teach-out.
- Teach-Outs and Closed School Discharges:
- If Corinthian itself provides the teach-out, students will not have a right to a discharge of their federal loans.
- If another school provides the teach-out, students should have the right to opt out of the teach-out and instead seek a full discharge of their federal loans.
- Students who participate in the teach-outs will not receive a refund from Corinthian. They may, however, withdraw for any reason before completing the teach-out, and still qualify for a full discharge of their federal student loans. Student who withdraw before completing should do so in writing and keep a copy to include with their discharge application.
- Credit Transfers and Closed School Discharges: Finally, students who opt-out or withdraw from the teach-out, but transfer any credits and complete a comparable program at another school, will not qualify for a discharge of their federal loans.
Some Information for Sale School Students
- No Refund or Discharge Rights: If Corinthian sells a school, students at that school will not have a right to a refund under the agreement or to a closed school discharge.
- No Refund or Discharge If New Owner Discontinues a Program: New owners may discontinue programs before students are able to complete them, unless the Department prohibits this. If a new owner terminates a program, students who are unable to complete will not be entitled to a discharge of their federal loans or any refund from Corinthian.
- If Corinthian Cannot Sell a School:
- If Corinthian is not able to sell a school and the school closes, students who are unable to complete their program due to the school closure may be eligible for a discharge of their federal loans (see conditions listed above).
- In addition, students who withdraw 120 days before a school closure will qualify for a closed school discharge. The Department may extend this 120-day period for “exceptional circumstances.” To extend this period, students must provide evidence that the quality of the education deteriorated before withdrew.
Information for All Corinthian Students
- New students should think twice about enrolling at Corinthian. It is unlikely that Corinthian will be able to follow through on its promises to provide quality educations at this time.
- Students should document any deterioration in the quality of instruction or student services at any campus or online programs. Examples include instructors failing to show up for class, unrepaired instructional equipment, days when the campus is unexpectedly closed, or any other unusual circumstances. This means writing down observations with dates and the names of Corinthian employees and student witnesses.
- Students should compile a list of other students and their contact information. What each of them experience can often serve as evidence to support each others’ closed school discharge applications or other types of claims.
- Students should file a complaint with their state attorney general and state oversight agency if they believe that Corinthian is engaging in any improper or questionable conduct.