WATCH: Rep. Susie Lee Presses Department of Education on the Department’s Mishandling of For-Profit School Closures and Failure to Allow Students to Discharge Their Student Loans

June 20, 2019
Press Release

WATCH: Rep. Susie Lee Presses Department of Education on the Department’s Mishandling of For-Profit School Closures and Failure to Allow Students to Discharge Their Student Loans

Washington, DC—Today, Representative Susie Lee (NV-03) questioned Department of Education officials today on the troubling recent closures of dozens of for-profit colleges, as well as the department’s mishandling of such closures at the expense of thousands of students. Numerous for-profit institutions have recently closed and left students and teachers in limbo waiting for answers about their education and their jobs. Rep. Lee pressed Education officials on why the department provided misinformation about the school closures, the dates of which students withdrew, and misleading information about the students’ rights in discharging their loans, which led to many students being denied their student loan discharge requests.

Rep Lee: I’m going to move on to another issue with respect to the Dream Center Education Holdings who closed most of its institutions between December 2018 and March 2019. One of these schools, The Art Institute of Phoenix, provides an example of the improper handling of this. The Art Institute of Phoenix closed on December 28, 2018. This date is significant, because students who were enrolled up to 120 days prior to that date are then eligible to have their loans discharged. Unfortunately for these students, the Department’s webpage has provided misinformation on the date of closure. Specifically stating that AI Phoenix closed on March 8, 2019, and that students are “not eligible for a closed school loan discharge if they withdrew from classes before” November 8, 2018. From a review of the Department’s webpage, it appears that this is not the only school for which the Department has misinformed students of their rights. Ms. Minor, is the Department denying students’ closed school discharge claims if they withdrew from classes before November 8, but after August 30, the appropriate closed school discharge window specified in regulation?

Ms. Robin Minor: Respectfully, I am not aware that we had an incorrect date posted so I would have to go back and confirm what the information is and what would be the eligibility determination.

Rep. Lee: Okay, well I can confirm that the Department is, in fact denying these claims. Chair, I would like to submit documentation of two students whose claims were denied for this exact reason. Ms. Brandie Land and Ms. Christine Anderson. Both students applied for a closed school discharge through their servicer where they clearly indicated that they had attended AI Phoenix. The letters I plan to enter into the record are what their servicer—CornerStone—sent back to them incorrectly informing them that they do not qualify when they do. You know, it is just hard to overstate the personal risks and stakes here. Being told that they don't qualify for a full discharge when in fact they do is the difference between a lifetime of financial ruin or a lifetime of freedom. It is essential that the Department of Education and its servicers they contract with correct this error. Advocates have repeatedly called the Department and opened cases with the FSA Ombudsman Group, but this problem persists under your watch. Can you personally commit to looking into the claims of Ms. Land Anderson to ensure their issues are handled?

Ms. Minor: Yes, I will personally commit to look into those. We want to ensure that every student who is eligible for a closed school discharge receives it.

Rep. Lee: Great, Thank you.

Watch the exchange here.