United Against 'Debt Trap' of For-Profit Colleges, Students Fight Back with Loan Strike

Taking a stand against the for-profit schools which they say have saddled them with mountains of debt, a number of recent graduates, dubbed the Corinithian 15, on Monday launched a student debt strike.

The former students, with help from the anti-debt collective Rolling Jubilee, are refusing to pay the federal loans that Corinthian College Inc., the for-profit college chain, reportedly duped the students to sign up for, in exchange for a degree which they say is worthless.

"I was excited to attend Everest College online because they promised to help me find a well-paying career," said student loan striker Latonya Suggs, from Cincinnati, Ohio. Suggs said she "took out thousands in loans so that I could make a better life for my son," but upon graduating found that the criminal justice degree she obtained from Everest is not even recognized by most employers.

"I am completely lost and in debt," Suggs continues. "Not only did the school fail me, but the Department of Education failed me because it is their responsibility to make sure that these schools provide a quality education at an affordable cost at a scam-free school."

Another former Everest College student, Natasha Hornes, described how the college coerced students into taking out thousands of dollars in loans.

"Some Everest students were pulled out of class and told they could not return unless they signed loan paperwork," Hornes said. "Other times, loan officers came into class and made us stop what we were doing to sign financial aid forms. We were told that we had no choice. If we didn't sign, we couldn't stay in school."

Under both state and federal investigations for their tactics, Corinthian College Inc., one of the largest for-profit, post-secondary education companies in the country, announced in July that it would close its doors because its funds had been frozen. And while many of the institution's tens of thousands of students have been given relief from their private loans, the student strikers are asking the federal government to forgive those loans as well.

"Not only did the school fail me, but the Department of Education failed me because it is their responsibility to make sure that these schools provide a quality education at an affordable cost at a scam-free school."
--Latonya Suggs, former Everest College student

The Corinthian corporation owns the Everest Institute, Everest College, WyoTech and Heald colleges, which together have a total of over 70,000 students.

Further, despite multiple accusations of fraud, the U.S. Department of Education has seemingly "come to its rescue," as Meghan Byrd notes for the Campaign for America's Future Blog.

Byrd writes:

Fearing a sharp rise in students eligible for loan refunds, the Department of Education struck a deal with Corinthian, monitoring the organization's selling of campuses and other assets. Currently 56 of the 107 campuses have been purchased by ECMC, a debt collection company that has never run a school. Previously, ECMC was an Education Department contractor. The firm plans to keep the colleges open under the name Zenus.

Late last week, a number of notable voices from the left including Naomi Klein, Bill McKibben, Vijay Prashad and Frances Fox Piven sent a letter to the U.S. Department of Education declaring their solidarity with the Corinthian 15.

The letter states that the group, by declaring a strike, is "taking a stand for all student debtors, by reminding us that for-profit schools are just an extreme version of our increasingly untenable system of debt-financed higher education."

The student debt strike is the latest action by the Occupy Wall Street affiliate Rolling Jubilee, which in 2012 launched a crowd-funded Strike Debt campaign, that purchased secondary debt for pennies on the dollar before abolishing it completely.

The new iteration, the Debt Collective, is a form of a "debtors union," according to Rolling Jubilee member Ann Larson. Larson explained to the Guardian that by finding others who owe to the same lender, debtors are empowered to take collective action around their debt.

The Rolling Jubilee also announced on Monday that they have abolished more than $13m of private debt owed by 9,438 former Corinthian students, using funds leftover from the Strike Debt campaign.

Observers are hopeful that the "debt strike," the first of its kind in U.S. history--according to its organizers--will shed some light on some of the millions of students saddled with debt as a result of predatory lending schemes.

"While 15 debt resisters will not upend the private loan system or the financial markets they fuel, their defiance aims to expose structural problems driving the financialization of higher education," Michelle Chen wrote for the Nation on Monday. "Since their debt crisis is exacerbated by Corinthian's apparent massive cheating of students, they're sparking a national conversation on the real value--and true cost--of college."