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IPFS News Link • Education: Government Schools

"Most Of Us Ended Up At Office Depot":

• Zero Hedge

Last summer, Corinthian Colleges closed its doors amid government scrutiny of for-profit colleges.

The school - which had been the recipient of some $1.5 billion in annual federal aid funding - was variously accused of employing deceptive marketing practices, falsifying job placement records, and lying about graduation rates.

As we noted when the doors were shut, for-profit students won't have a particularly easy time transferring their credits (meaning they would have to start over at another school if they wanted to complete their degrees). That means that when a government mandated closure leaves them out in the cold, they'll likely seek to take advantage of their 'right' to have their debt discharged.

Sure enough, the government quickly found itself scrambling to respond after Secretary of Education Arne Duncan received a group request from 78,000 former Corinthian students requesting loan forgiveness in late May. Essentially, the law says students can have their debt expunged in the event they've been defrauded. In cases like Corinthian, where the government itself has effectively accused the school of fraud, it's difficult to deny students' claims.

We immediately suggested that in the wake of the Corinthian affair, many more of the nation's heavily indebted students and former students would seek to have their loans forgiven as well. Here's what we said in May:


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