More people have joined those who are protesting paying their student loans, bringing the number of people to 85. It has been a month since this protest has started with only 15 people, and the group has come to be known as the Debt Collective. The former students had gone to one of the Corinthian Colleges that had broken the law, which was the catalyst for the protests in the first place. With the increase of those who are refusing to pay their loans, the government is starting to take notice. The Consumer Financial Protection Bureau (CFPB) has asked for the group to come to Washington to talk about the debt cancellation.
Corinthian has allegations for deceptive marketing and lying about the graduation rates. They had dubious programs and the students were essentially forced to take out loans. Corinthian is one of the worst for-profit schools and has since begun to close campuses. Since Corinthian had essentially forced their students into debt, the CFPB doesn’t have the power to overturn the loans. However, it is the step in the right direction.
The former students have themselves at a very large risk. According to the Washington Post, if they do not pay their debts, they “can lose their paychecks, tax refunds or even a portion of their Social Security.” In other words, they would not be able to make any money until their loans are payed off. Before people join the group they must understand the risks of refusing to pay their loans. The group has been working with a lawyer to help them. They have filed a defense to repayment claim, which would make an appeal to discharge the federal loans on the grounds that the colleges broke the law.
The organizers of the group have posted their claim online and have had about 220 applications from former Corinthian students. The increase of students who want to be apart of the group will help their cause. They’re already at nearly 100 people saying they won’t pay their loans, and that is not something the Education Department would want. While in Washington the organizers want to speak with some people from the Education Department, and it would seem to be in the interest of the Education Department to meet with the organizers.
For private loans, they will see a 40 percent reduction in their loans right away and the rest will be forgiven over years. However, it is a little more tricky to the federal loans that were issued. The Education Department is still trying to find a solution so the students won’t have to pay for an education they did not receive. If the loans are forgiven, it would mean that this would cost a lot of money from taxpayers in order to make up the money the government will not be getting from the students.
Photo: AP / Manuel Blace Ceneta
