After granting student borrowers a temporary victory last month against the Department of Education, a federal judge this week will consider larger questions about whether all Corinthian Colleges students misled by their former institution should get full relief of their student loan debt.
A handful of former Corinthian borrowers, represented by the Project on Predatory Lending at Harvard University, are suing the department over a plan, announced in December, to award partial relief of student loan debt to defrauded borrowers. Federal Magistrate Sallie Kim ruled last month that the system violated the Privacy Act by improperly using average earning data from Social Security records, and issued an injunction against collecting on those loan debts.
What remains at question, though, is whether a de facto policy previously existed at the department that dictates any misled borrowers who attended Corinthian institutions should get full debt relief. If such a policy did exist, it could aid the arguments of borrowers seeking full debt relief.