Court: Gov’t violated privacy law for defrauded students

WASHINGTON — A federal court has ruled that the Education Department violated privacy laws with regard to students defrauded by the Corinthian for-profit college chain.

In a break with Obama administration policy, Education Secretary Betsy DeVos announced in December that some students cheated by the now-defunct schools would only get a part of their federal student loan forgiven. In order to determine how much to forgive, the agency analyzes average earnings of graduates from similar programs.

But a California district court ruled late Friday that the department’s use of Social Security Administration data in order to calculate loan forgiveness violates the Privacy Act. The court ordered that the Education Department stop the practice and stop debt collection from these students.

The court also said that it needs to hear more from the agency and plaintiffs in the class-action suit in order to decide whether or not to compel the agency to return to full loan forgiveness. A hearing is scheduled for June 4.

The decision marks an important victory for students challenging the partial loan forgiveness rule.

Toby Merill, director of the Project on Predatory Student Lending at Harvard University, which is representing the students, hailed the decision.

“The notion that students got anything other than negative value from Corinthian has been roundly disproved by student experience and the judgment of employers and the legitimate higher education sector,” Merill said in a statement. “

An Education Department spokesperson did not respond to a request for comment Saturday.

DeVos said the approach of the Obama administration left room for potential abuse and unfairly burdened taxpayers who ended up paying for those loans with their taxes. DeVos said her new procedure will take into account the value a student received from their education and compensate them for what they didn’t get.

But critics slammed the new rule as unfair since tens of thousands of Corinthian students have already received full loan discharge under the Obama administration. They said some students will not be able to get a full refund just by virtue of working a minimum-wage job in an unrelated field and making some income.

One of the plaintiffs in the suit, Jennifer Craig, borrowed $9,000 to attend a Corinthian medical insurance and billing program in 2014, but she never received her diploma because the school shut down in 2015. She was unable to get a job in her area of study because the school did not provide her with the necessary practical training. The Education Department only forgave 20 per cent of her loan. Craig says that she and her husband live in poverty and are unable to pay off the remaining 80 per cent.

The Obama administration cracked down hard on for-profit colleges accused of fraud and shut down Corinthian and other major chains and tightened regulations for the schools. The administration spent $550 million to fully forgive the loans of tens of thousands of students.

There are currently nearly 100,000 claims from students still pending at the department.

Maria Danilova, The Associated Press

Just Posted

RDC’s new name to be unveiled in February

The next big milestone for Red Deer College is a new name,… Continue reading

RCMP seek suspect in Rimbey armed robbery

Rimbey Liquor Store was robbed at gunpoint about 8:30 p.m. on Saturday

Rimbey RCMP searching for suspects in break and enter spree

Rimbey RCMP are looking for a pair of culprits responsible for five… Continue reading

Stolen vehicle and gun seized in Blackfalds

Blackfalds man to appear in court

Blood moon over Red Deer

Moon captures attention

2-for-1: Total lunar eclipse comes with supermoon bonus

On Sunday night, the moon, Earth and sun lined up to create the eclipse, which was visible throughout North and South America

Giuliani clarifies comments about Trump Tower Moscow project

Trump’s lawyer Rudy Giuliani clarifies comments he made

Opinion: Faith in immigration must be preserved

Canada has a deserved reputation for extending its arms to newcomers, but… Continue reading

Olympian Adam van Koeverden wins federal Liberal nomination in Ontario riding

MILTON, Ont. — Former Olympic flag-bearer Adam van Koeverden will be carrying… Continue reading

World champion Osmond says it’s “really nice” not to know what future holds

SAINT JOHN, N.B. — Kaetlyn Osmond has a world title, Olympic medals… Continue reading

World economy forecast to slow in 2019 amid trade tensions

For Canada, the IMF’s estimate for growth in 2019 was 1.9 per cent, down from expected global growth of 3.5 per cent

Timberlake pops in on patients at Texas children’s hospital

DALLAS — Justin Timberlake has pulled some sunshine from his pocket for… Continue reading

UK police speak to Prince Philip about not wearing seatbelt

LONDON — British police have spoken with Prince Philip after the husband… Continue reading

‘Gotti’ leads Razzie nominations, Trump up for worst actor

The nominations were announced on Monday, Jan. 21 with some movies earning up to six nominations

Most Read