Dive Brief:
- Some 50 advocacy groups are petitioning the heads of the U.S. Department of Education, Consumer Financial Protection Bureau, and Department of Justice with “grave concerns” about the proposed sale of 56 Corinthian Colleges Inc. campuses.
- In a letter to the three agency heads, the group says that liability shouldn’t be waived for any prospective buyer of the Corinthian schools unless the sale gives significant relief to current students and former students while ensuring future abuses won’t occur.
- Among the groups’ concerns are the “widespread evidence of fraud” committed by Corinthian and the track record compiled by the proposed buyer, non-profit debt collector ECMC, which includes alleged harsh tactics against debtors and abuses of the bankruptcy process.
Dive Insight:
Given the objections raised by the advocacy groups and others, including a group of U.S. senators, the Obama Administration could be saddled with the you-break-it-you-own-it mandate in the sale of Corinthian colleges — fair or not. If strict conditions aren’t imposed on the Corinthian colleges buyer, any objectionable actions by the new owner could be blamed on the Department of Education — and the White House, by extension — because the department will have approved the entity.
The letter outlines some specific conditions that the groups want the prospective buyer to agree to. The groups signing the letter include organizations representing students, faculty, veterans, minorities, consumers, low-income families, higher education institutions, and labor unions, including: the American Association of State Colleges and Universities, American Association of University Professors, the United States Student Association, the NAACP, AFL-CIO, Service Employees International Union, and Consumers Union, publisher of Consumer Reports magazine.