Tags: student | college | debt | refuse | pay | Corinthian Colleges | Debt Collective

Movement Grows for Students Refusing to Pay Loans

By    |   Monday, 30 Mar 2015 09:50 PM

There is a growing number of students who say they will not pay back their student loans despite the financial risks.

A group of 15 students first started the movement, called the Debt Collective. Those students claim their school, the not-for-profit Corinthian Colleges, broke the law through deceptive marketing practices and lying to the government about its graduation rates.

Current and former students are crying foul over Corinthian Colleges' business practices and are asking the Department of Education to forgive their federal student loans.

The Washington Post
reports that 85 more students have joined the original 15, while 300 more have expressed interest in joining what is now a legal claim.

The group is working with an attorney, who has helped them file a defense to repayment claim, reports the Post.

The Department of Education does have the authority to forgive student loans because of a disclaimer on all loan applications that reads, according to the Post, "In some cases, you may assert, as a defense against collection of your loan, that the school did something wrong or failed to do something that it should have done."

The group will meet with a representative from the Department of Education during a meeting with the Consumer Financial Protection Bureau (CFPD) in Washington, D.C., this week.

"If the Department of Education isn't there yet, our meeting with the CFPB has helped at least get them to the table," Debt Collective organizer Luke Herrine told the Post. "It's in the department's interest to discuss this. I don't think they want more than 100 students refusing to pay their loans publicly. I don't think that's a good thing for them."

The Department of Education is working with the CFPB and student loan debt collector ECMC Group to reduce the repayment amounts by 40 percent for many of the private loans taken out under Corinthian Colleges' Genesis program, according to the Post. Students still owe on federal loans, however.

People who do not pay their student loans risk ruining their credit, which comes with a host of problems.

The Department of Education announced recently it will terminate contracts with three student loan collection firms because of "unacceptably high rates."

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There is a growing number of students who say they will not pay back their student loans despite the financial risks. A group of 15 students first started the movement, called the Debt Collective. Those students claim their school, the not-for-profit Corinthian Colleges,...
student, college, debt, refuse, pay, Corinthian Colleges, Debt Collective
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Monday, 30 Mar 2015 09:50 PM
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