Student Debt Strikers Call Fed's Loan Forgiveness Plan a Bureaucratic Sham

Despite a new announcement by the U.S. Department of Education that it will begin a process of debt-forgiveness for students cheated into high-priced loans by predatory for-profit colleges, one of the groups most responsible for lobbying to have the debts erased is reacting bitterly, saying the plan is more complicated than it needs to be and that those already victimized by one government-backed scheme should not be put through the ringer for a second time.

“The legal and most painless possible process for students is no process. […] An automatic, class-wide discharge for defrauded Corinthian students would not cost taxpayers, as it would be offset by government profits on the student loan program.” 

On Monday, Education Secretary Arne Duncan announced that ten of thousands of students who attended institutions operated by Corinthian Colleges Inc.—which, before recently going bankrupt, ran hundreds of schools under the names of Heald, WyoTech and Everest colleges—would be eligible to apply for debt forgiveness as part of the new plan.

As part of the announcement, Secretary Duncan said he would “hold schools accountable for practices that undercut their students and taxpayers.” And he added, “Where students have been harmed by fraudulent practices, I am fully committed to making sure students receive every penny of relief they are entitled to under law. We will make this process as easy as possible for them, including by considering claims in groups wherever possible, and hold institutions accountable.”

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As the Associated Press reports:

The DOE released a fact sheet to explain the new program and answer questions for students curious about whether or not they will be eligible for the loan-forgiveness program. But the fact sheet itself, a lengthy and complicated document, was already raising the alarm for student debt activists who appeared unconvinced that Duncan’s new plan will deliver on its “as easy as possible” promises.


In response to the plan announced by Duncan, the group Strike Debt—which made international headlines by bringing together Corinthian students who vowed publicly that they would not repay loans they considered fraudulent—said forgiveness of their debt need not be so complicated. Furthermore, they challenged the idea, made in much of the mainstream reporting on the plan, that it would somehow “cost taxpayers” to nullify their loans.

In a statement, the group said:

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