As AG, Kamala Harris took on for-profit colleges. Over a decade later, the fight isn’t over. | The Boston Globe

Originally appeared in the Boston Globe

September 7, 2024

By Tal Kopan

WASHINGTON — Since Vice President Kamala Harris vaulted to presidential candidate in July, she has cast her resume as the perfect foil to Donald Trump’s, down to her toppling of a for-profit college chain as a prosecutor in contrast with him as a billionaire who ran one.

“As attorney general of California, I took on one of our country’s largest for-profit colleges that was scamming students,” Harris says in her stump speech. “Donald Trump ran a for-profit college that scammed students.”

Harris did pioneer a case against Corinthian Colleges, suing the for-profit college chain in 2013, which ultimately brought it down and set in motion a process to help students protect their money from schools that defrauded them.

But the reality since has been a case study in how such successes can be limited.

Even after Harris’s work on the case for more than a decade, tens of thousands of former Corinthian students are still being charged for their loans for the worthless program that scammed them, advocates say, despite Harris and the Department of Education announcing two years ago those debts would be wiped away.

The reason appears to be outside of Harris’s control: Advocates blame the loan servicer, who they are now suing.

The case isn’t the most well known of Harris’s career, but it is illustrative. Harris has used the case to demonstrate that her time as a prosecutor wasn’t just about traditional violent crime, but also a considerable amount of work as a consumer watchdog.

The unfinished business also serves as a reminder that bureaucratic red tape and entrenched powerful interests can make real justice for victims elusive, even years after a seeming victory.

In a statement, Harris’s campaign blamed the delay in part on the Trump administration’s stonewalling of debt relief, but acknowledged there was work to be done.

“While there is still work to be done to help the victims who are suffering, hundreds of thousands of people who were preyed upon now have real relief today because Vice President Harris has fought tirelessly for them for more than a decade,” campaign spokesperson Joseph Costello said.

As for the now-defunct Trump University, the former president in 2017 settled lawsuits brought by students alleging fraud against the real estate education venture without admitting any wrongdoing. His spokesperson said Harris’s campaign was the “scam” and that students were “overwhelmingly satisfied with the education they received at Trump University.”

Over a decade ago, in the wake of the financial crisis, for-profit colleges were booming with students looking to better their resumés and raking in federal loans. As concern about mounting student debt from that industry rose, consumer watchdogs in the California attorney general’s office took notice and began to dig into the schools’ recruitment tactics.

The investigation bore fruit, and Harris in 2013 sued Corinthian Colleges, a national chain, exposing fraud and predatory business practices that ensnared hundreds of thousands of students by making false promises about job placements and left them saddled with loans for a worthless degree.

Corinthian went under, and the findings from her investigation, paired with a more than $1 billion judgment against Corinthian in 2016, had wider repercussions: a nationwide reckoning that brought significant scrutiny to the entire for-profit college industry and established ways for students harmed by fraudulent business practices to get their loans wiped away.

In this Oct. 10, 2013, photo, California Attorney General Kamala Harris gestured while standing by a display showing an internal document showing the target demographic of Corinthian Colleges, during a news conference in San Francisco. Eric Risberg/Associated Press

But Corinthian never paid the penalty, to the state or students, as it went bankrupt. By then, Harris and other state attorneys general, including Massachusetts’ Maura Healey, had petitioned the Department of Education in 2015 to wipe away loans for Corinthian students.

Nicklas Akers, who runs the consumer protection division of the California attorney general’s office, worked to bring the case forward under Harris’s leadership. He said Harris withstood pressure to resolve the case quickly and urged staff to stay focused on helping the victims of the fraud.

“She pushed us in a way no AG I had seen on, ‘How do we take care of those students, what can we get for them?’” said Akers, who spoke with the Globe in his personal capacity.

At the end of the Obama administration, the Education Department created an application process that helped some students. Then in 2017, the Trump administration took over and tightened the borrower protection rules its predecessors enacted, while denying nearly all applications for relief.

Harris, meanwhile, had been elected to the US Senate. As vice president, she returned to the issue in 2022, announcing the Department of Education would automatically wipe away such loans for every student who had attended Corinthian schools, as she and others had asked in 2015.

“Finally — and sadly it has taken this long — finally, that promise is fulfilled,” she said that day.

But for some, it hasn’t yet.

Jaime Maldonado, 47, who lives in the San Francisco Bay Area, got a notice in 2022 from the Department of Education telling her her loans for the Corinthian school Heald College, which she attended from 2007 to 2010, would be included in their announcement. She “did a happy dance” upon learning she would finally benefit.

“I was prepared to die with this debt over my head ... and that’s the only way it’s going to go away,” Maldonado said, noting that with interest, even as she has kept up with her payments, she would still owe more than she originally took out.

But she is still receiving bills for her loan from MOHELA, the servicer that owns her debt and says she still owes more than $30,000. Maldonado said neither MOHELA nor the Department of Education has been able explain why the loan hasn’t been discharged, despite multiple requests. She is now the lead plaintiff, represented by the Boston-based Project on Predatory Student Lending, of a lawsuit filed Wednesday alleging MOHELA has failed to follow through on the Department of Education’s orders.

In a statement, a MOHELA spokesperson said the servicer works “under direction” from the Office of Federal Student Aid and pledged to “vigorously defend ourselves against false allegations.”

The Department of Education maintained in a statement to the Globe prior to the filing of the lawsuit that all Corinthian borrowers will get their loans canceled, and that payments are currently paused, but noted the process is “complicated.” The Department of Education estimated in August in a separate court case that roughly 20 percent of Corinthian borrowers have not yet gotten their loans discharged.

Maldonado, who supports Harris, said the vice president really does “fight for the little person,” but she said the still looming debt makes this fight seem unfinished.

“I feel like I’ll have the full feeling of justice once it’s paid and it’s gone and I don’t see it on my credit report anymore,’ Maldonado said.

Others who have worked on the cause give Harris credit for her initial work on Corinthian, but questioned her persistence. That includes a group who were featured onstage at last month’s Democratic National Convention, the Debt Collective, which helped organize a “debt strike” of Corinthian students in 2015 that also built pressure for relief.

“It’s cool this is part of her legacy,” said Astra Taylor, a cofounder of Debt Collective. “When we were at the DNC all day, I was like, ‘Are we being used?’ Because the proof will be what happens in 2025 and 2026.”

Taylor was there with Nathan Hornes, a former Corinthian student and debt striker who spoke in favor of Harris’s work onstage. He told the Globe he did not meet Harris but felt the campaign understood his experiences. But Taylor called it a “gut punch” to later realize that Hornes’s speaking time at the convention was sandwiched between two political figures who coincidentally were once Corinthian board members — National Urban League President Marc Morial and former defense secretary Leon Panetta. Harris’s campaign did not respond to a request for comment about the juxtaposition.

Ann Bowers, 64, a former marketing professional from Tennessee, was one of the original Corinthian debt strikers. She enrolled at the company’s Everest College online after a vehicle accident left her disabled but didn’t finish her bachelor’s degree before Corinthian shut down.

She said she got goosebumps seeing Hornes, her fellow striker, onstage at the DNC, but said the work is not finished against for-profit colleges broadly.

“Corinthian is just what brought it to a head,” Bowers said. “If [Harris] does get into office, I hope that she will continue that fight with just as much vigor as she did in California. Maybe more. ... I have grandchildren. I don’t want to see them go through this.”