The Sorry Legacy of the For-Profit College Boom

May 17, 2016
  • Industry News
  • for profit

Last year, I met fifteen former students and graduates of Corinthian Colleges who had taken a remarkable action to protest the collection of their student debt. Corinthian, a for-profit institution that was, at the time, facing a financial meltdown and several lawsuits over alleged fraud in its recruitment process, had recently started shutting down or selling off its campuses. The students, calling themselves the Corinthian Fifteen, had organized a "debt strike," refusing to repay their student loans even at the risk of going into default. Their argument was that the Department of Education shouldn’t collect on loans that students were misled into incurring, especially since they earned a degree that was all but worthless or, in some cases, found that their college had shut down before they could graduate.

The Corinthian Fifteen—and more than a hundred other Corinthian students who later joined the strike—were among the millions of students who enrolled at for-profit universities during the last ten years. Students who went to these schools have come to account for a disproportionate share of the country’s unpaid student-loan balance; they also default at higher rates than other students. So they have been bearing a particular burden in the broader student-debt crisis, which has, since 2010, seen student loans overtake credit-card debt and car loans as the second-largest form of outstanding debt in the U.S.

Read more at The New Yorker: http://www.newyorker.com/business/currency/the-sorry-legacy-of-the-for-profit-college-boom