The 16,000 students at Corinthian College, the massive for-profit college system that shut down halfway through the semester andhas sincefiled for bankruptcyprotection, aren’t going away quietly.
The students have enlisted the help of attorneys from the
Public Counsel Law Center, Robins Kaplan LLP, and Strumwasser & Woocher LLP
to make sure that their voices are heard during the upcoming bankruptcy proceedings.
On Wednesday, the US Trustees Office — an agency of the US Department of Justice — granted the formation of a committee that will represent the students through the bankruptcy process. Attorneys representing the student group say that this is truly a unique situation.
“To our knowledge it’s the first time there has been a student committee set up for an educational institution that went bankrupt,” Anne Richardson, associate director of Public Counsel Opportunity Under Law, told Business Insider on Friday.
The attorneys see the formation of the committee as a victory for the estimated 500,000 current and former students impacted by Corinthian’s collapse, giving them a meaningful voice in the bankruptcy process.
Student participation is essential, claims Richardson, since their stake in the process is so much more vital than other creditors involved in the Corinthian bankruptcy filing.
“It’s clear that the debt that is at issue with the students is by far the largest portion of any creditor to this estate,” she said.
The decision to close was just the latest blow for the beleaguered for-profit network, which had been fined $US30 million two weeks earlier by the Department of Education (ED) for allegedly lying about job placement figures, and had been combatting allegations of abuses to students.
Indeed, Corinthian has been plagued with several investigations and lawsuits into its practices over the past few years, decimating what was once one of the largest for-profit systems in the US. As a result, many of the colleges closed in 2014. The Consumer Financial Protection Bureau (CFPB) and the ED worked together to secure $US480 million in debt relief to students of Corinthian.
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