Committee for the Abolition of Illegitimate Debt

Many people do not understand the difference between for-profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. , public, and private non-profit institutions of higher learning. All three generate revenue, but only the for-profit model exists primarily to enrich its owners. The largest of these institutions are national corporations designed to maximize profit for their shareholders instead of educating students.

These education companies now enroll around 10% of America’s college students, but they take in more than a quarter of all federal financial aid – as much as $33 billion in a single year. For-profit colleges can be up to twice as expensive as the nation’s top universities and routinely cost five or six times the price of community colleges.

Ninety-six percent of students who manage to graduate from for-profit institutions leave owing money, and they typically carry twice the debt load of students from more traditional schools.

Corinthian is one of the worst offenders in the industry. The company, which enrolled more than half a million students over two decades, preyed on low-income people and encouraged them to enroll in costly degree programs that did not lead to jobs. Instead, the company used federal student loan dollars to enrich shareholders and executives. The Department of Education supported the scheme, funneling billions in taxpayer funds to over 100 Corinthian campuses in two dozen states.

In summer 2014, after several state and Federal agencies began scrutinizing Corinthian’s business model, the Department of Education finally announced an investigation into the company’s finances. Corinthian announced that it would close its doors. But defrauded students are still expected to repay their loans.

The public hearing in Los Angeles brought former students and advocates together to demand that the Department cancel their debt.

Before the event, participants gathered to prepare their speeches.

At the hearing, former students spoke passionately to Department officials. Wearing red squares as a symbol of debtor unity, they described how they had been led into a trap.

Latonya Suggs, from Cincinnati, explained how Corinthian, with the support of the Department of Education, profited from her dream of finding a career. At the end of her statement, Suggs drew cheers from the crowd as she returned her graduation cap to Department officials: ’You can have this cap back,’ she said. ’I don’t want it.’

Tasha Courtright, whose young child is disabled, explained in painful detail how Corinthian made false promises that her investment in education would land her a well-paying job. ’I was lied to. They stole money that I didn’t even have,’ she said.

As students testified throughout the afternoon, it became increasingly clear that the Department financially supported a company whose primary goal was to shovel cash to investors at the expense of students and the public.

Chris Miller is one of four members of his family who was caught in Corinthian’s trap. An army veteran, Miller earned a degree from Everest but has been unable to find a job. Wearing his service medals, he challenged Department officials to discharge students’ debts. ’Do you have any honor and dignity?’ Miller asked Undersecretary Ted Mitchell.

After the hearing, students and supporters gathered at a local Everest College campus to stage a protest. They held signs demanding the closure of Corinthian and shared their stories with current Everest students.

Nathan Hornes, a leader of the movement who is $70,000 in debt for his Everest degree, led the spirited demonstration.

In December 2014, the Department of Education announced that dozens of Corinthian campuses would be sold to a new buyer, severely curtailing students’ chances for debt cancellation. But the fight continues. Students and organizers are in the midst of planning a new series of actions to keep the pressure on the Department of Education.

In addition to winning debt cancellation for defrauded students, organizers believe that the campaign against Corinthian and the Department of Education could serve as a model for a new kind of collectivity. Debtor collectivities could unite populations that are traditionally difficult to organize, including low-wage workers who move from job to job and young people who graduate from college with a lifetime of payments ahead of them.

Just as the labor movement evolved over decades to protect the rights and livelihoods of workers, so too a debtors movement could help fend off the most predatory practices of the creditor class. An old adage says: ’If you owe the bank $100,000, the bank owns you. But if you owe the bank $100 million, you own the bank.’ Leveraging this collective power is the idea behind the Debt Collective.