Millennials and Money: Students Seek Loan Forgiveness

by March 26, 2015
Photo via Flickr user Sarah Mirk

Photo via Flickr user Sarah Mirk

Student loan debt now tops $1 trillion in the United States, and seems like an inescapable reality for many young people. Still, some are trying their best to get out from under their debt loads.

One of the more drastic examples of trouble that millennials face with student loan debt comes from the Corinthian 15, a group of former students at the for-profit chain Corinthian Colleges, Inc. They refuse to pay back their student loan debt.

Their reason? The company began selling off schools and faced a shutdown after running what the Consumer Financial Protection Bureau called a “predatory lending scheme.”

One of the students, Mallory Heiney, wrote an op-ed for the Washington Post last week explaining the incredible debt that she and a number of other students took on while attending the Corinthian owned schools.

It’s a significant issue for students at for-profit schools. According to The New York Times, the money owed by these students could account for a quarter of all federal student aid debt.

The Corinthian students also maintain the teaching standards at the schools were deplorable. In refusing to pay their loans, the students say Corinthian Colleges, Inc. failed to fulfill its end of the loan agreement by not properly educating its students, often leaving graduates unemployed.

Students who take out federal loans can only use personal bankruptcy to get rid of them in rare instances, which means students face serious consequences for not paying them back.

The group’s protest highlights what could become one of the defining issues of the millennial generation.

Some, including Sen. Elizabeth Warren, a Democrat from Massachusetts, call for the forgiveness of all federal student loans currently on the books. While that might be drastic, doing nothing about the situation already is proving to have a negative affect on millennials’ future.

Story Ideas

What happens if you don’t pay your student loans?

StudentLoans.gov

Insurgent star still paying off loans.

A previous version of this article incorrectly stated the legal status of Corinthian Colleges, Inc. in the United States.