You might have heard that Corinthian Colleges, a nationwide for-profit college system that advertised on TV constantly through institutions like Everest College, closed its doors in April after a record fine of $30 million by the Department of Education and legal action from various local authorities over deceptive and fraudulent practices. The shutdown left at least 16,000 students high and dry, with mounting student loan debt and possibly worthless college credits and degrees.
Now, the other shoe is about to drop, and it will affect all taxpayers. President Obama and the Department of Education want to bail out all those Corinthian College students left with student loan bills. The exact amount of the bailout is not yet known (sounds familiar for the Obama administration), but The Christian Science Monitor says nearly $3.6 billion in student loans have been made to Corinthian students over the years – and we could be on the hook for the outstanding balance. From the Monitor article:
“Students have been hurt, but the department is establishing a precedent that puts taxpayers on the hook for what a college may have done,” said Sen. Lamar Alexander, R-Tenn., who chairs the Senate Education Committee.
Alexander said one of the problems has been an inherent conflict of interest with having the Education Department provide loans and regulate colleges.
“If your car is a lemon you don’t sue the bank that made the auto loan; you sue the car company,” he said.
Corinthian Colleges was one of the largest for-profit schools when it nearly collapsed last year and became a symbol of fraud in the world of higher education and student loans. According to investigators, Corinthian schools charged exorbitant fees, lied about job prospects for its graduates and, in some cases, encouraged students to lie about their circumstances to get more federal aid.
Lost in the debate over the proposed bailout is the fact that these students KNEW that Corinthian schools weren’t traditional colleges, and the limited benefit of the education from technical and training schools like these have been known for years. The credits earned at these colleges rarely transfer to real four-year universities, and they knew this. These students made a poor choice, and now expect us to help them out. It is too bad for these folks, because most are working folks who cannot be full time students at a posh Ivy League college with no real-world responsibilities. They were preyed upon, but they weren’t totally naive. And paying back their loans is a hard lesson.
When someone defaults on a loan, the banking system absorbs the hit. How about the other colleges who benefit greatly from student loans all chip in to pay it back or help out those students? Instead of having us cover for a student loan program we get no benefit from, how about making Harvard and Berkeley take in all those Corinthian College students? A little dash of blue-collar common sense on these campuses would put all those coffee-house liberals on notice.