In 2015, the now defunct Corinthian Colleges, a for-profit education company, was found guilty of conducting illegal and immoral practices by preying on specific demographics who they viewed as prime candidates for exploitation because of their desire for an affordable, post-secondary education. Individuals were duped into taking out student loan debt with the promise of a better life for themselves, their families and their communities.
Vice President Kamala Harris, who was California’s attorney general during the prosecution of this case, recently said, “The company deliberately targeted specific populations of people, such as veterans, single mothers and single fathers, people living below the poverty line, people who lost jobs during the Great Recession, people who believed in the power of education to transform their lives, people who simply wanted to take control of their own future.”
The Corinthian Colleges case, as one stark example, outlines some of the major issues that community leaders face in helping their constituencies improve their financial well-being. These issues were discussed during our Financial Education Policy Convenings (and revisited on our podcast series). Stakeholders, decision-makers and experts from across the country shared some of the obstacles they encounter:
- In our session on postsecondary education, participants discussed how students do not have the experience or training to make informed decisions on complicated lending products, such as student loans. LISTEN TO EPISODE 2
- In our session on supporting financial education in rural areas, stories were shared on how the lack of access to quality resources can lead to predatory opportunities. LISTEN TO EPISODE 5
- In our session on financial well-being and supporting diverse cultures, conversations surfaced on the inherent distrust many communities have in corporate institutions. LISTEN TO EPISODE 6
The Corinthian Colleges story has resurfaced because 560,000 students who were impacted will receive $5.8 billion in loan relief from the federal government. While this is retribution in the near term, the erosion of trust in the higher education system may be longer-lasting. Community leaders and reputable financial educators, most of whom want nothing more than to help people, will now have to work that much harder to earn back the trust of those that are in the most need of their help.