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Feds erase loan debt for more Heald students

  • Heald College graduate Ernest Higa held a sign as he joined other students outside the school’s Honolulu campus on April 27. (Jamm Aquino/The Honolulu Star-Advertiser).

WASHINGTON » The government is erasing the loan debt of more than 7,000 former students of the now-defunct Corinthian Colleges — totaling over $100 million, but still representing a tiny fraction of a federal debt-forgiveness program that could run well into the billions of dollars.

The Education Department announced today that it has approved a second wave of Corinthian loan forgiveness, this one for students who filed “borrower’s defense” claims with the government, alleging they were lied to or misled by the company. Corinthian was once one of the largest chains of for-profit colleges but filed for bankruptcy protection in May 2015 amid fraud allegations.

In a progress report released by the department, Joseph Smith, who is overseeing the debt relief, said his team has approved relief to 1,300 former Heald College students, totaling nearly $28 million in loans that now will not have to be repaid to the government.

“We will continue to provide forgiveness to every student who has been similarly mistreated,” said Ted Mitchell, the department’s undersecretary.

Heald, which had campuses in California, Hawaii and Oregon, was one of three schools under the Corinthian umbrella. The other two were Everest and WyoTech schools in California, Arizona and New York.

Another 5,800 former students from Heald, Everest and WyoTech who filed “closed school” claims with the government will see their debt discharged, totaling $75 million. In his report, Smith said he expects tens of millions of dollars of additional relief to be granted in the coming months under the closed-school claims.

In all, education officials have said the bailout of Corinthian students could potentially cost up to $3.2 billion, if all students who borrowed government money dating back to 2010 were to seek relief. But officials also have said all former students may not file claims.

To date, more than 17,000 claims for college loan debt relief have been received by the department. Most of them cover Corinthian schools, though some claims have been received for other schools, including the Art Institute, ITT and the University of Phoenix, said Smith’s report.

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      • Mikethenovice, you are not too bright if you are indeed a military retiree. You pay federal tax on your military pension, and if you are receiving Social Security, you also pay some taxes on that. You do not pay state income taxes on your military pension or SS, but if you buy alcoholic beverages from an on-base outlet, you are indirectly paying state excise tax because under Federal law, all alcoholic beverages sold on military bases in Hawaii must be purchased from distributors in the state. The military is exempt from paying the GET, but to ensure that the state gets the GET, Hawaii state law requires that the excise tax must be paid by distributors on all alcoholic beverages as they are brought in to the state. Although distributors cannot add GET to prices of beverages sold to the military, the GET already paid by distributors is simply included in the beverage price. I’ll bet you did not know that.

  • For-profit colleges for the most part are worthless. Their graduation and employment rates are abysmal. The best and brightest students do not enroll in these inferior colleges. But the federal government in its infinite wisdom have deemed it worthy to squander taxpayer money to bail out the students vacuous enough to enroll in these types of lousy and low-grade colleges.

    • Donna: you are so wrong. so wrong. you must not have much confidence in yourself. how dare you belittle the students who have worked so hard to achieve their diplomas from this school, my husband being one of them. how dare you Ms. Donna. I know many students who went on to excellent jobs in the electronics tech field, computer tech fields. Check your resources good before making such a bogus comment.

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