Last Thursday, the U.S. Department of Education suspended federal financial aid for prospective students at ITT Technical Institutes, a national, publicly traded, for-profit college. The next day, the Bureau for Private Postsecondary Education prohibited California ITT locations from enrolling new students.
For months, serious questions had been raised about ITT’s educational quality, recruiting standards and financial viability. With stock prices plummeting, its bleak future bears striking parallels to that of the now-bankrupt Corinthian Colleges. And about 4,900 students at ITT’s 13 California campuses could face the same obstacles as former Corinthian students.
Corinthian, with 23 California campuses, closed its doors in 2015, leaving roughly 350,000 students nationwide to deal with the fallout from its deceptive practices. The U.S. Education Department expanded loan relief, but students were required to navigate a complicated application process.
My Assembly Bill 573 would have funded local nonprofits to assist the students, but the governor vetoed the legislation last year, saying the federal process would be sufficiently easy for students. Nearly a year later, this has not been the case. Only 15 percent of eligible Corinthian students have applied for federal loan relief and less than 3,800 have had their applications approved.
Now, Gov. Jerry Brown has another chance to help students harmed by the illegal actions of for-profit colleges.
Senate Bill 1192, authored by Sen. Jerry Hill and myself, was given final approval by the Legislature on Monday and is headed to the governor’s desk.
The bill would ensure that students can recover lost tuition and will reimburse students for as much as $500 in legal costs from obtaining loan relief. The bill would also create an Office of Student Assistance and Relief to help navigate the federal loan forgiveness process.
In 2015-16, ITT students paid an annual tuition of $18,048, about $4,600 more than tuition for in-state students at the University of California. Most ITT students rely on federal loans; unfortunately, about 20 percent will default within three years of entering repayment and face severe lifelong consequences.
Earlier this year, the Assembly Higher Education Committee heard from Eric Martin, who graduated from Corinthian’s WyoTech College in 2013. He was promised hands-on learning and job placement assistance, but by 2015 faced insurmountable student loan debt. He was among the lucky few to obtain loan forgiveness, which he credits to assistance from local nonprofit legal aid organizations.
Sen. Hill and I worked closely with the administration on this proposal. Gov. Brown should sign SB 1192 to ensure that California is best positioned to help all affected students find the relief they deserve.
Jose Medina, a Riverside Democrat, represents the 61st Assembly District. He can be contacted at Assemblymember.Medina@assembly.ca.gov.