Eileen Connor is president and executive director of the Project on Predatory Student Lending, a nonprofit legal organization representing student borrowers.
Vice President Kamala Harris is touting her record on predatory for-profit colleges on the presidential campaign trail — and deservedly so. But in reality, work still needs to be done to fulfill promises to student borrowers. As the clock ticks down on the Biden-Harris administration, she needs to finish the job.
Our client, Jaime Maldonado, remembers nearly ten years ago when Harris, then her state's attorney general, announced findings of significant misconduct against the now-defunct Corinthian Colleges. To Jaime, an alumna of Corinthian's Heald College, a report detailing those findings validated the feeling that she had been duped and scammed by the institution. Still, she always assumed that her Corinthian debts would die with her and did her best to pay each month — barely keeping up with the ballooning interest.
In June 2022, when Harris and the U.S. Department of Education announced a group discharge for Corinthian borrowers, canceling nearly $6 billion in federal student loans for all borrowers who had attended Corinthian institutions, Jaime was elated. A day she thought would never come now promised to change her financial future.
Group discharge announcements for other predatory for-profit schools followed, including Marinello Schools of Beauty, ITT Technical Institute, Westwood College, the Art Institutes and Colorado-based campuses of CollegeAmerica. The department sent notices informing borrowers that they had no further obligation to repay the loans, which would be canceled without any further action on their part.
Public announcements are important, but implementation matters. Lo and behold, more than two years later and countless hours spent trying to get clarity from student loan servicers and the Education Department, Jaime and thousands of borrowers are still fighting for that relief.
Meanwhile, they have watched as the Education Department continues to announce more discharges and as Harris travels the country talking about the success of this work.
The urgency to finish the job is now growing. While the Higher Education Loan Authority of Missouri, or Mohela, and other loan servicers are legally obligated to fulfill their contractual obligations and discharge these loans, it’s up to the Education Department to hold them accountable. If they won’t, others will, including Jaime. Our recent class-action lawsuit, Jaime Maldonado v. Higher Education Loan Authority of Missouri, demands that the group borrower defense loan discharges be implemented immediately.
We acknowledge the many challenges confronting the Education Department and the complexity of the student loan system it (along with Congress) created. But those challenges do not excuse the department from holding servicers accountable and delivering long-overdue justice to defrauded borrowers.
Fifty-six members of Congress — led by Massachusetts Sen. Elizabeth Warren and South Carolina Rep. James Clyburn — agreed. In September, they sent a letter to the Education Department citing our lawsuit against Mohela, calling the allegations “explosive.” The letter urged the department to immediately protect borrowers from “MOHELA’s abuses” and begin determining if the student loan servicer is meeting its contractual obligations.
The cost of inaction is significant. Every day that borrowers are left in limbo, they suffer real financial consequences.
For those who attended notoriously fraudulent schools like Corinthian, the Art Institutes and ITT, the trauma has endured for nearly a decade. Our clients have been denied mortgages, car loans and jobs because this debt remains on their credit, even though the department said it is canceled and unenforceable. They’ve delayed starting families, going back to school and worry about the multigenerational effects of this debt on their loved ones.
We don’t know what will happen in November’s election. But we do know what happens when a Trump administration is in charge of the Education Department. Borrowers’ legal rights are trampled and ignored, and policies ensuring essential consumer protections for borrowers are eliminated. The previous U.S. secretary of education was even held in contempt of court for violating a judge’s order and illegally collecting on Corinthian borrowers.
Real progress has been made and Harris deserves credit for her efforts. But the department needs to move faster and with a real sense of urgency to ensure these canceled debts are actually discharged. Borrowers can’t afford to wait any longer, and neither can the Biden-Harris administration.
It’s time to finish the job.
