Students Affected By Corinthian Colleges Closures Have Some Relief Options

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Although many of us saw the final collapse of Corinthian Colleges Inc. on the horizon since last summer, for the nearly 16,000 students who were currently enrolled at the company’s 28 remaining Everest University, Heald College and WyoTech campuses news that they no longer have a school to attend was no doubt jarring, opening a door to questions about their future education and the debt burden they now carry.

Consumer groups and the Department of Education are trying to quickly address former Corinthian College students’ concerns, but most answers will come with time.

“Many students will be panicked and upset,” Robyn Smith, an attorney working with the National Consumer Law Center, tells Consumerist. “It’s super important that they understand, that while this is a difficult time, they are in the best position, in terms of getting both federal and private loan relief.”

Such was the case for one current CCI student who emailed Consumerist. The woman, who attended Everest University online, says she found about about the school’s closure when trying to login for class today.

“I have been trying to get a hold of my school to figure out what I need to do, but no one will respond to my calls or emails,” she says. “I do not think it is right to just spring this on students and teachers, and I believe that they should of informed us of this before so that we could have been better prepared.”

This student’s ordeal is similar to the situation that thousands of CCI students found themselves in last year when the company announced it would close or sell nearly 100 campuses across the country as part of a deal with the Department of Education.

At the time, Consumerist compiled a list of what students might expect as a result of their campus being closed or sold. While many of those options – such as teach-out programs – are no longer viable for CCI students, most will now benefit from the closed school discharge.

Students attending a school slated for closure, or if that student withdrew within 120 days of the school closing, would be entitled to a closed school discharge, meaning they would have no further obligation to repay their Direct Loans, Federal Family Education Loan (FFEL) Program loans (which include Stafford and PLUS loans), or Perkins Loans.

Although a closed school discharge does not generally cover private student loan debt, students who attended CCI campuses in California – with the exception of Heald College – may be eligible for relief under the state’s Student Tuition Recovery Fund.

The fund, which is administered by the California Department of Consumer Affairs Bureau for Private Postsecondary Education, provides tuition reimbursement to eligible students enrolled at the time of school closure or within 60 days of the school’s closure.

In a statement [PDF] released Monday, the Bureau announced it would be at CCI’s 13 Everest College and WyoTech campus locations in California Tuesday and Wednesday, April 28 & 29, to advise students about their options.

“The Bureau had anticipated such a development and prepared, and will now execute,a massive effort to assist the more than 4,000 Everest and WyoTech students in California,” the Bureau said in a statement. “About one-third of the Bureau’s staff will travel to the 13 campus locations to provide students with applications for the Student Tuition Recovery Fund (STRF) and information about getting federal student loans discharged, and to help students obtain their transcripts, financial aid documents and other important records.”

Several other states – including Arizona, Ohio, Oregon and New York – have similar tuition recovery programs available to eligible students. Information about those programs, as well as legal contacts, can be found on the Student Loan Borrower Assistance website.

Smith tells Consumerist that the California attorney general’s website will soon act as a landing page for many student affected by the CCI closure. Legal services organizations and other groups are expected to provide contact information and dates for school closure discharge clinics on the site.

Additionally, students from CCI campuses in California can click on their exact location to see which organizations they should contact with questions.

While students who attended CCI are likely trying to grapple with their new-found situation, Smith warns students not to jump into a new relationship with other colleges.

“They need to watch out,” she tells Consumerist. “What happens when a for-profit closes is that another swoops in on students and starts to market their programs. We caution students to be smart on their next education choice, sometimes local community colleges are better, more affordable and have better programs.”