Lawsuits by the federal Consumer Financial Protection Bureau and state attorneys general in California, Massachusetts, and Wisconsin may help their cause. In separate suits filed in recent years, authorities allege that Corinthian fraudulently induced students to take out loans to attend its schools by misleading them about future job prospects. The company has denied the accusations.
The striking debtors have been in touch with federal officials, but have yet to receive public support. The Education Department, in a statement last week, encouraged them to make good on their debts. Waters is likely the first federal official from any government branch to endorse their strike.
The former Corinthian students "have decided that this is predatory lending and they're not going to repay their debts," Waters said. "They're organizing, and I support them."
The debt strike has brought renewed attention to the Education Department's lackluster efforts at protecting the integrity of the federal student loan system, and its inattention to the plight of borrowers in distress. The Education Department allows schools to generate tens of billions of dollars in annual revenues through taxpayer-backed loans and grants to students. In return, the department is supposed to ensure, for example, that schools aren't misleading students about their graduation or job placement rates.
But in the case of Corinthian, which is slowly dismantling itself as a result of numerous federal and state investigations into alleged wrongdoing, student advocates claim the Education Department effectively turned a blind eye to mounting evidence that students were being misled into taking out federal student loans.
http://www.huffingtonpost.com/2015/03/03/maxine-waters-corinthian-15-_n_6796246.html