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L.A. County Fair Sept 1-24, 2017

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$183 million in student loan relief sought for former Corinthian College students

A scheme designed to evade an important Department of Education rule could soon lead to an estimated 41,000 former Corinthian College students and loan borrowers receiving more than $183 million in student loan relief.

Aequitas Capital Management, a former financial services firm, is charged with acting in concert with Corinthian College to preserve the now-closed for-profit college’s heavy reliance upon federal financial aid. Operated across much of the country, the alleged fraudulent partnership also enabled Corinthian to trap students in unaffordable private student loans.

Tens of thousands of Corinthian students were harmed by the predatory lending scheme funded by Aequitas, turning dreams of higher education into a nightmare,” said Consumer Financial Protection Bureau (CFPB) Director Richard Cordray. “We will continue to address the illegal lending practices of for-profit colleges and those who enable them.”

An investigation and subsequent charges were coordinated by a state-federal effort that included 13 state attorneys general working with CFPB and representing: California, Colorado, Connecticut, Florida, Illinois, Iowa, Kentucky, Maryland, New York, Oregon, Pennsylvania, Texas and Washington.

Together the governmental officials charged that Aequitas aided Corinthian in a $230 million predatory lending scheme to mask its lack of compliance with a Department of Education rule requiring for-profit colleges to have a minimum 10 percent of its revenues from non-governmental sources. The CFPB alleges that both firms knew the students could not repay the loans and would default. At the time, the default rate ranged from 50 to 70 percent.

The default would not affect Aequitas because Corinthian was committed to buying back all delinquent loans. Aequitas retained only those loans that did not default but charged high interest rates and therefore reduced the chance of any financial risk.

In 2016, the Securities and Exchange Commission also sued Aequitas and three of its top executives. That complaint alleged the firm ran an illegal Ponzi scheme that defrauded 1,500 investors.

These were sham loans used by for-profit schools and lenders to access federal taxpayer dollars to fund programs that did nothing to help students get ahead,” noted Illinois Attorney General Lisa Madigan. In Illinois, Corinthian owned and operated seven Everest College campuses and approximately 2,800 Illinois students are expected to be eligible for relief.

These private-label loans known as “Genesis” loans had terms that required students to begin repayment as soon as they were enrolled in Corinthian classes. The government investigation also charges that both Aequitas and Corinthian continued to make the loans despite knowing students could not afford them. Aequitas reportedly knew that the loans provided no benefit to Corinthian other than the appearance of eligibility for federal funds.

If the proposed settlement is approved, eligible borrowers will be notified within 90 days following its announcement. Officials estimate that borrowers will average $6,000 to $7,000 in loan relief.

Genesis Loan borrowers who were 270 days or more past due as of March 31, will receive forgiveness on all balances, according to CFPB. All other Genesis Loan borrowers would be forgiven any accrued and unpaid interest, fees and charges that were 30 days or more past due as of March 31; additionally, these borrowers’ remaining principal owed would be cut 55 percent.

Earlier this year, the Center for Responsible Lending (CRL) released a series of research reports on for-profit colleges. Findings revealed that for-profit students have lower graduation rates and carry heavier debt loads than their counterparts at private, non-profit and public schools. The research also uncovered that students of color are disproportionately enrolled in for-profit colleges in Connecticut, Colorado and Maine. Though these states have comparatively few residents of color, students of color were heavily recruited.

Many for-profit college students are working hard to break into the middle class and build financial security for themselves and often their families,” said Lisa Stifler, CRL’s deputy state policy director. “Our research shows the anguishing outcomes of high debt, no degree and few promising job prospects that fall more heavily on people of color.”

These findings and others underscore the fact that as higher education costs continue to climb, the choice of institution is ever more important. Just as a combination of state and federal resources were needed to bring former Corinthian College students closer to financial justice, it will take continued efforts at both levels of government that are watchful of the quality of education offered.

Recent rollbacks in consumer protections from the federal Department of Education (DOE) do not bode well for student borrowers. For example, the Gainful Employment rule developed under the Obama Administration holds hundreds of career colleges accountable for the education students received. Earlier in August, DOE announced its intention to “reduce the burden on institutions” by extending appeal deadlines involving schools that failed the rule.

Further, instead of objective measures to determine regulatory compliance, appeals will be reviewed on a case-by-case basis. These institutions may also continue to enroll students dependent upon federal financial aid -- even during appeal.

"Unfortunately, Corinthian is not alone in abuses that harm students," added Stifler. "State and federal regulators must continue to crack down on the widespread problems that exist among for-profit schools.”

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Join us for a Block Party at the Hesperia Branch Library

The San Bernardino County Library invites you to join us at the Hesperia Branch Library as we let our constructive imaginations run wild at this Block Party event! Build an amazing experience as you get the chance to meet and greet characters from the Lego Movie and build a LEGO car to race! Don’t forget your camera. Enjoy a variety of fun-filled crafts, a balloon artist, and more.

This event is another opportunity to celebrate and support the Countywide Vision’s literacy campaign, Vision2Read. The Block Party event will take place on Wednesday, Sept. 6 from 4 to 7 p.m. Be certain to bring your library card, as every 15 items checked out during the event earns you 10 minutes of playtime in our Jumbo Block Building Room and an opportunity drawing ticket for a chance to win awesome prizes. All activities are free and open to all ages.

The Hesperia Branch Library is at 9650 7th Avenue in Hesperia.

The San Bernardino County Library System is a dynamic network of 32 branch libraries that serves a diverse population over a vast geographic area. The County library system strives to provide equal access to information, technology, programs, and services for all people who call San Bernardino County home.

The library plays a key role in the achievement of the Countywide Vision by contributing to educational, cultural, and historical development of our County community.

For more information on the San Bernardino County library system, please visit http://www.sbclib.org/ or call (909) 387-2220.

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When You Educate A Girl, You Educate A Nation

As I write this, I am preparing to travel with my colleagues to Nigeria, where I will have the honor of meeting some of the Chibok girls who were released after two waves of negotiations between Boko Haram and Nigerian government officials. It is my fourth trip to Nigeria since April 14, 2014, when the terrorist group shocked the world by abducting nearly 300 schoolgirls from their dormitory rooms. More than three years later, 113 of the original 276 Chibok girls are still being held captive.

Many of the girls who escaped their kidnappers on that fateful night or have since been released have remarkably not allowed this hugely traumatic ordeal to diminish their determination to pursue an education. It is my mission to help ensure that they, and indeed every girl in Nigeria, have the opportunity to go as far as their desire to learn will take them.

Before Nigeria’s President Muhammadu Buhari was sworn into office, the president-elect wrote in a New York Times op-ed about the urgent necessity to educate girls so that “they will grow up to be empowered through learning to play their full part as citizens of Nigeria and pull themselves up and out of poverty.” He rightly surmised that the country owed at least that much to the Chibok schoolgirls, whose fate at that time was gravely uncertain. I look forward to working with the nation’s activists and government leaders to examine ways to help Buhari keep that pledge.

There is an African proverb that says, “If we educate a boy, we educate one person. If we educate a girl, we educate a family—and a whole nation.” Fifty percent of Nigeria’s population is female, so it borders on the absurd to not push for them to receive the “best possible education” that Buhari promised in his opinion piece. They will in turn ensure that their children—boys and girls—are educated, which as the proverb suggests will greatly benefit both their families and ultimately the nation by equipping it with a workforce that is prepared to help undo the extensive damage that has occurred during Boko Haram’s reign of terror.

A lack of education has been a key factor in Boko Haram’s ongoing ability to successfully recruit young men and boys and continue to replenish losses incurred in battle with the Multinational Joint Task Force. While the insurgents teach boys, that “Western education is sinful,” educated mothers are living examples of the critical role education plays in determining one’s future success. Those boys grow up viewing a world full of possibility and opportunities and are therefore extremely unlikely to see the appeal of becoming a terrorist.

Girls can change the world and there is no better example of that than the young Pakistani activist Malala Yousafzai, who was famously shot in the head at age 16 for daring to question the Taliban’s efforts to deny her right to an education. In addition to becoming the first recipient of her country’s peace prize, being named one of Time magazine’s most influential people, and receiving the United Nations Human Rights Award, she is the world’s youngest Nobel laureate. Malala has earned global acclaim for championing education for girls around the world, including Nigeria, and after completing her studies at Oxford University will return to her native Pakistan to continue those efforts.

It is my hope that the Chibok girls, some of whom met with Malala this summer, will be inspired to follow her path, one on which tragedy is turned into triumph.

Frederica Wilson represents Florida’s 24th congressional district, including parts of Miami-Dade and Broward counties. You can follow Rep. Wilson on Twitter @RepWilson.

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