PRI: ‘If you owe the bank $1 trillion, you own the bank,’ say student debtors who are fighting back

Career College Central Summary:

Fifteen students who took out loans to attend for-profit institutions owned by Corinthian Colleges, Inc., announced this week that they are going on a "debt strike." Their action, led by a national group called Debt Collective, is directed specifically against Corinthian. They say the company uses dubious legal and ethical techniques to attract students to its colleges so they can cash in on their federal loans.
“They were led into a debt trap,” says Ann Larson, an organizer with Debt Collective. “They owe tens of thousands of dollars, in some cases for a degree that didn’t lead to a job, and for an education that was substandard. This institution is well known for preying on people who are low income … people who don’t have a lot of support networks in their lives and are looking for a way to improve their circumstances.”
Larson pointed out that Corinthian, which she called a "predatory institution," is also being sued by the federal government and several state agencies. The company, she says, is mostly funded by the public. The institution derives about 90 percent of its funding from tax dollars and the federal student loan program.
“For over two decades, they’ve taken money from a public source — student loans — and used it to enrich themselves, to enrich investors," Larson says. "Then the students were left holding the bag."
But she also says Debt Collective is making a broader statement about student debt as a whole. “There’s a [$1.16] trillion debt problem in the United States," Larson says. "These students are on the leading edge of taking the offense and saying, ‘We need to do something about this, we’re not going to wait for policy makers and elected officials to do the right thing. We’re going to demand justice.'”
Larson says the same trends that fuel Corinthian and other for-profit education companies can be seen in public higher education as well. As states slash their budgets and grants and endowments dry up, public colleges and universities shift the cost directly onto students, utimately forcing many to take out larger loans.
"For more and more middle- and working-class families, going into debt is the only way to get a college education,” Larson says. “It didn’t used to be that way, and it certainly doesn’t have to be that way. … We’ve gotten into this mindset where it seems perfectly acceptable to spend tens of thousands of dollars and go into decades of debt to get a college degree. We really need to start rethinking that system.”

Click through to read the full article.

PRI