Forgiving Student Debt at Corinthian Colleges and Other For-Profits

Source: New York Times, Room for Debate, May 7, 2015

The for-profit Corinthian Colleges filed for bankruptcy after investigations into possible recruiting fraud led the Department of Education to suspend its access to federal student aid. Thousands of former students are asking the government to forgive their loans, arguing that the school used predatory practices to persuade them to borrow money. Other for-profit colleges have been accused of similar practices.

Loan relief for students could cost taxpayers millions of dollars, and establish a precedent for other students unhappy with their college degree. Who deserves debt forgiveness when for-profit colleges close or are accused of fraud?

Debaters include:
Insufficient Protections at the Department of Education
Ben Miller, New America Foundation
Students who borrow loans from the federal government have a reasonable expectation of protection.

Forgiving Loans Would Be a Mistake

Richard Vedder, Center for College Affordability and Productivity
Loan forgiveness would set a precedent and encourage excessive borrowing.

For-Profit College Student Debt Should Be Forgiven

Osamudia R. James, law professor
We cannot expect these students — who are mostly veterans, minority and low-income — to carry their debt burden back to already economically destabilized communities.

Align the Incentives of Students and Schools

Andrew Kelly, American Enterprise Institute
If an institution’s students cannot pay back their loans, the school should be on the hook to pay back a portion of the loan balance.

The Government Should Actively Notify Borrowers

Robyn Smith, National Consumer Law Center
Thousands of low-income borrowers whose debts should be forgiven instead struggle financially because of the government’s draconian powers to collect student loan debts.