A.G. Schneiderman urges eligible New York students to complete DOE Application for Student Loan Cancellation; students not receiving the application may still be eligible for relief

Attorney General Eric T. Schneiderman announced that today his office began notifying 3,000 New Yorkers who attended certain programs at schools operated by Corinthian Colleges, Inc., including Everest Institute in Rochester, that they are eligible for cancellation of their federal student loans.

The students are eligible for federal loan cancellation based on findings by the U.S. Department of Education that the school made misrepresentations about the employment success of graduates of certain programs.

“Corinthian Colleges used false promises of career success to lure students, leaving many with enormous debt and few job prospects,” said Attorney General Schneiderman. “My office is committed to helping these students receive much-deserved relief from their student loan debt.”

Corinthian, which operated for-profit colleges Everest Institute in Rochester and Everest University, abruptly ceased operations in 2015. The DOE’s investigation found that Corinthian misrepresented graduates’ employment success in connection with some of its programs. Students who enrolled in the identified programs during specified time periods are eligible for discharge of their federal student loans. For a list of the programs and time-periods, visit here.

Attorney General Schneiderman joins 43 other states and the District of Columbia in this outreach effort. Students will receive a notification from his office that contains an application for loan cancellation. If a student’s application is approved by the DOE, the students’ loans will be cancelled, and any payments already made will be refunded.

Attorney General Schneiderman’s outreach will target students who attended the programs identified by the DOE during the relevant time-period and who are eligible for a “streamlined” process to discharge their federal student loans.  However, any student who attended a Corinthian school who believes that the school lied about job prospects or other issues may apply to have their federal student loans canceled using the DOE’s discharge application.  More information is available here.

The Attorney General had previously called upon DOE to clarify students’ options following the closure of Corinthian Colleges in 2015.

The Attorney General has made cracking down on illegal activity by for-profit colleges a priority. The office reached a $10.25 million settlement with Career Education Corporation for fabricating placement rates, and was part of a settlement with Education Management Company to resolve allegations that the school misled prospective students on program costs, graduate rates, and placement rates. As part of the settlements, EDMC agreed to forgive over $100 million outstanding loan debt. In January, the Attorney General reached a $2.75 million settlement with DeVry University over misleading advertisements about employment and salary prospects.

Borrowers should beware of student loan scams. You can apply for loan forgiveness, or get information on loan forgiveness, free through the DOE. The DOE never charges application or maintenance fees, so if you’re asked to pay, walk away.

It may take time for the DOE to process applications, so anyone who applies for loan discharge should continue making payments on his or her loans until informed by the DOE or his or her loan servicer that the federal loans are in forbearance while the application is pending, or that his or her loans have been cancelled.

For additional information about federal loan discharges, students can visit here. Students can also call the DOE’s hotline at 1-855-279-6207 or e-mail questions about discharge of their federal student loans to FSAOperations@ed.gov.

By martha

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