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Arne Duncan Transcript: Some For-Profit Colleges Have "the Ethics of Payday Lending"

06/10/2015 06:54 pm ET | Updated Jun 10, 2016

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On Monday, U.S. Secretary of Education Arne Duncan and Under Secretary Ted Mitchell had a conference call for reporters to announce the Department's plans to offer debt relief for students from the now-collapsed, predatory Corinthian Colleges. I offered some analysis that day about the announcement, but here's the whole transcript. It contains some of the most emphatic statements ever from Duncan on the abuses of for-profit colleges -- and the complicity of many Members of Congress. 

TRANSCRIPT

Press Call on Student Borrower Protections, Assistance

June 8, 2015

2 p.m. ET

Coordinator:          Welcome and thank you for standing by.

At this time, all participants will be on a listen-only mode until the Q&A session of today's conference. The time to ask a question, press Star 1 on your touchtone phone and record your name.

This call is being recorded. If you have any objections, please disconnect at this time.

I would like to turn the call over to Press Secretary of the US Department of Education, Ms. Dorie Nolt. Ma'am, you may begin.

Dorie Nolt:            Hi all. Thanks for joining us today. You should have the materials - the fact sheet and a blog from Undersecretary Ted Mitchell already. If you don't have those, please ping me and I'm happy to send them to you. They are also on our Web site.

And first we'll hear from Secretary Duncan. Then we'll hear from Undersecretary Mitchell. And then we'll open it up for Q&A. Arne and Ted are on the record, and anybody else on staff who is speaking is on background.

Arne?

Arne Duncan:        Thanks all of you for taking the time. I'm going to be quick and hand it off to Ted as he and his team have just done extraordinarily hard and important work. But here's a couple of quick thoughts before I give it to him.

Obviously, we're here to talk primarily about debt relief for Corinthian College students. And many of you like us have heard stories from students who have simply had a terrible experience at Corinthian. You have to be made of stone not to feel for these students.

Students everywhere deserve and need the opportunity to make their lives better through education - to climb the economic ladder. That's exactly what these students tried to do. But a lot of them ended up with huge debts and a degree that meant little to employers, if they got a degree at all. The whole idea of a career college was a farce for them. (Unintelligible) about bad actors (unintelligible) college industry.

Now more than ever, a college degree is the best path to the middle class. But at half - but that path has to be safe. And that's why we're all so determined to crack down on colleges that leave students with huge debt, worthless degrees and few meaningful job prospects.

Some of these schools have brought the ethics of payday lending into higher education. They prey on the most vulnerable students, and leave them with debt that they too often can't repay. We must have accountability to protect both students and taxpayers.

And that's what we're working on through a series of actions that are simply unprecedented. No previous administrations, no state and no Congress has ever done this. Simply put, we cannot tolerate the situation where all the risk of higher education is born by students and taxpayers, while the for-profit industry uses its financial support to try and block change in Congress. That means we must do business differently.

A couple of quick messages - first, to students: We firmly believe that you deserve a college education free from rip off scams. And if you've been defrauded by a school, we'll make sure that you get every penny of the debt relief you are entitled to through a streamlined process as - as streamlined a process as possible. We're going to make that as simple as we legally can, while also safeguarding the interest of taxpayers.

To members of Congress on both sides of the aisle: I want to be very clear. Students and taxpayers need action to strengthen accountability. Beef up efforts to protect students and taxpayers from waste and fraud. Don't fight them off. And that's rules that hold colleges, not taxpayers, responsible for fraudulent acts, and provide additional resources to our department that we requested to fully enforce accountability.

To taxpayers: I want to say we are committed to being responsible stewards of your investment in educational opportunity. And to college executives and the management teams and their boards of directors, I want to say very clearly - keep your promises and make sure you're delivering real value for students. If you're doing that, you'll have our full support. But if you defraud students and if you're not honest, we'll work across the administration and make sure the full weight of the law is brought to bear.

And finally to the nation, I say it's time for action, so we can see fewer students in the situation that these Corinthian students are in today. And that's why I appreciate so much the work that Ted and his team have been doing. They're extraordinarily smart, but most importantly they have a real heart. They have a real care for students. I'm grateful to have Ted and team leading this effort.

I'll turn it over to Ted now to walk through specifically what we're announcing today. Ted?

Ted Mitchell:        Thanks, Arne. Thanks for your leadership. And thanks to all of you who are on the phone today.

What so many Corinthian students experienced as Arne said is just plain wrong. And we're committed to acting aggressively to insure that students receive every penny of the debt relief they're entitled to. So let me talk about our next steps.

First, let's talk about what we're going to do to expedite debt relief for Corinthian students whose schools have closed. There is an established and straight-forward process and application available at studentaid.gov for students who attended Corinthian campuses that closed. Typically, closed school debt relief is only available to students who attended the school at the time of closing or withdrew from the school within 120 days of its closing.

Today, we are announcing that we are expanding eligibility for this type of debt relief. In recognition of the tumble faced by students at Corinthian schools that closed, Secretary Duncan is exercising his authority so that any student who either attended Corinthian at the time of its closing or withdrew from Corinthian after June 20, 2014, in a Corinthian school that ultimately closed is now eligible for closed school loan discharge. So our first action today is extending the window for debt relief to students who were in Corinthian schools that closed.

Now, let me turn to another kind of relief we're providing to former Corinthian students. This is for Corinthian students who believe that they were victims of fraud by their school, regardless of whether the school closed or not. This process is called "borrower defense to repayment."

First, we will enable anyone who wants to apply for this debt relief the option to stop paying their loans while we set up an application form and process claims. Thus, we will offer immediate loan forbearance and will halt collection activity for students whose loans are in default for all Corinthian students who believe they were defrauded on any or all of their federal direct loans if they want that option.

All Corinthian students who intend to submit the borrower's defense claim can choose to have their loans placed in forbearance or stop collections for 12 months. Then, they can do this by filling out a simple form on studentaid.ed.gov. To date we have received about 1,400 borrower defense claims. The loans of these students will be placed into forbearance or collections stopped while those claims are being reviewed.

In addition, we are working to find ways to fast track relief based on legal findings for large groups of students, such as those enrolled in the whole program at a particular school at a particular time and place. That means that there's no need for these students to make any individual showing that they were affected by the school's fraud, which will make for a much simpler and quicker process.

Today, we are announcing that we are doing just this for the large majority of Heald College programs based on the department's findings of misrepresentation of placement grades. I want to thank our colleagues in the California Attorney General's office for their help with this.

We have posted a list of programs and dates covered by our findings at studentaid.ed.gov, and as well as a straight-forward attestation form that students in these programs can fill out to seek borrower defense relief. Beyond that to insure that we have a clear, efficient process for borrowers, we will announce within the next three weeks the selection of a special master to guide the debt relief process for all Corinthian students, including a streamlined application which borrowers will be able to complete online. The special master will present recommendations within two months of his or her selection. And those recommendations will be public.

But while we work on these steps, we will also be developing new regulations to clarify and streamline the borrower defense process. That process will not slow down the loan discharge process for current applicants. All of the information about options for students is posted at studentaid.gov/corinthian. And a fact sheet and blog post about these efforts can be found on the home page of the Department's Web site at ed.gov. But as Arne said, to do everything that's needed to protect students and taxpayers, we need Congress to do its part.

Before I close I'd like to recognize all of the students and advocates who provided insight on how best to help in this complicated issue. I want to also thank members - pardon me - members of my team who have dedicated hundreds of hours to make sure that we do this in the best way possible for students and taxpayers.

I hope all of you see that the steps we are announcing today are part of the Obama Administration's comprehensive approach to protecting students, eliminating bad actors and encouraging behavior that improves student outcomes, especially in making it easier to afford and complete a degree that will lead to good outcomes.

We will continue to work with students and with advocates as we develop and build out our processes. This is a new process and as you all know, new territory for us. And while we may not have it perfect the first time, we're committed to seeking your feedback, and as necessary making improvements to the process quickly.

Part of that is getting to your questions. So at this point we can open it up for questions and comments.

Dorie Nolt:            Operator, can you prompt everybody how to queue up for a question?

Coordinator:          Thank you. At this time we will begin the Q&A session. To ask a question you may press Star 1 on your touchtone phone. Please unmute your phone and record your first and last name clearly when prompted. To withdraw your question, please press Star 2.

One moment for our first question. For questions on queue, one moment.

This one goes to Josh Mitchell. Sir, your line is open - go ahead.

Josh Mitchell:       Yes, hi. Thanks. I had a couple questions just to start. First of all, so what - how exactly are you guys going to decide who at Corinthian, you know, sort of can have their debt wiped out? I mean is it every single student that ever went to a Corinthian school? It seems like that's going to be pretty complicated.

And what is the potential sort of tab here if we just look at that - of that one company? How much tax dollars are we talking about?

Ted Mitchell:        So we're - thanks for the question, Josh. So, we want to create a process that is based on our established legal authority that will enable us to work through claims as quickly and as efficiently as possible, requiring the least amount of effort on the part of borrowers.

And so, we will be looking at these claims when we can in groups, as we've done today with the Heald student. And we will going forward look for ways to find sort of commonalities between claims so that we can look at them together.

But we do know that in the case of borrower defense, borrowers need to demonstrate that or we need to find that state laws have been violated and that they have been harmed by the acts or omissions of the institution. And so while we will batch where we can, we will probably also be looking at claims on a smaller basis.

If we were to look at the total amount of outstanding loans for Corinthian students over the last five years, we would be looking at about $3.5 billion. But I think for today's news it's more appropriate for us to be looking at the Heald students.

And while we are still working that out, we believe that there are about 40,000 borrowers who are impacted by today's decision, and that those borrowers have outstanding loan balances in the neighborhood of between $500 and $600 million.

Arne Duncan:        Just quickly, we obviously don't know how many students will take this up. So that's the potential side of this. But students have to step up. This is new work for us, and we'll see where it goes.

Dorie Nolt:            Okay, next question. And folks, try and ask one question at a time, only because we have a lot. And I want to be sure we get to all of them. We can follow up after this if you don't get your question answered. Next question, please.

Coordinator:          Okay. Next question goes to Allysia Finley. Your line is open - go ahead.

Dorie Nolt:            You're muted if you are talking.

Coordinator:          Ms. Finley, your line is open. Are you here?

Arne Duncan:        Operator, can we go to the next question, please?

Coordinator:          Okay. Next question goes to Kerry Field. Your line is open.

Kerry Field:          My question was how will the Department determine that a state law has been violated? Will there need to be a lawsuit with findings?

Ted Mitchell:        So this is exactly one of the jobs for the special master will be to help - to advise us on how best to go forward with that. But as is the case in our Healed findings today, in that case we - the Department through its own work - established that state law had been violated.

Kerry Field:          But will the Department rely on other people's findings as well?

Ted Mitchell:        So, I think it that it's important to distinguish between investigations and formal court decisions. And so we want to look at - and the special master will guide in this - we want to look at evidence when there is relevant evidence. And we will, you know, certainly take evidence - (unintelligible) kinds of evidence into account. And certainly judgments in state court would be pretty critical to us.

Kerry Field:          I think...

Dorie Nolt:            Next question, please.

Coordinator:          Next question goes to Allysia Finley with Wall Street Journal. Your line is open.

Allysia Finley:      Hi. Would states or rather (unintelligible) of the students who were at Heald Colleges and that have closed, would they - regardless of whether they transferred to another state college or community college - would they - they'd be eligible for loan forgivement?

Ted Mitchell:        So they - those students would be eligible to bring borrower defense claims, yes.

Allysia Finley:      So they wouldn't automatically be eligible just under the first option.

Ted Mitchell:        So, sorry - let me back up. So Heald students who are in schools that closed would be eligible for closed school loan discharge.

Allysia Finley:      Even if they had further credit - can't transfer their credits elsewhere?

Ted Mitchell:        So that's right. So if they transfer their credits, they would not be eligible for the closed school loan discharge. But they still would be eligible for borrower defense.

Allysia Finley:      Okay, thanks.

Ted Mitchell:        Uh-huh.

Dorie Nolt:            Next question.

Coordinator:          Next question goes to Mike Vasquez with Miami Herald. Your line is open.

Mike Vasquez:      Hi. Good afternoon. I know you guys said one question. I'm going to have to try to squeeze in two here. First is there a time limitation? If I went to a school in 1998, can I assert a borrower defense claim now? And secondly the difficulties with Corinthian of course go back for many years.

And when we talk about the taxpayer price tag now, I'm sure there's some folks who would say, you know, the Education Department should have shut down Corinthian five years ago, and we wouldn't have to deal with all this loan forgiveness now. Did your department drop the ball on the front end dealing with Corinthian?

Ted Mitchell:        So what - I'm going to ask [Department official] to answer the first question.

Dorie Nolt:            And remind everybody that[Department official]  is on background.

[Department official]:       We haven't set any time limits for borrower defense. It could be something that we'll develop as we develop the process with the special master. But at this point there are no time limits on it. And also for (unintelligible) I can say that there are no time limits on that.

Arne Duncan:        In terms of timing we did a pretty - our team did a pretty thorough investigation of Corinthian and found from things that were extraordinarily awry - wrong, and that led to them being shut down. And we're going to continue to look at other places. And sadly this may not be the only case where this has to happen.

And at the end of the day - I just want to come back. We have to challenge Congress to stop fighting us on this. If you look at the history of what we've tried to do over the last five or six years on this, there's a lengthy track record here going back to gainful employment, where not just the industry which we expect. But Congress is part of every step of the way.

And we're going to continue to try to do the right thing for students and taxpayers. But hopefully Congress will wake up here and get members on both sides of the aisle, and figure out that they need to strengthen our hand in dealing with these guys.

Ted Mitchell:        And Mike, this is Ted. Just to - as a reminder to everybody, states and accrediting agencies also need to step up their game in order to have this - multiple views on the work of all institutions, but in particular these career colleges that are too often concerning to us.

Dorie Nolt:            And that speaker right before Ted was Secretary Duncan. I just want to be sure that's clear for folks on the phone. All right, next question, please.

Coordinator:          Next question goes to Anne Flaherty with Associated Press. Your line is open.

Anne Flaherty:      I wanted to go back to how many borrowers this is going to affect and how much it's going to cost the government, at least what you're estimating right now. When you have $542 million in loans with just the Heald students alone, I mean is it fair to say if all of them apply for this sort of - for their debt to be erased, then taxpayers could be on the hook for $542 million?

But that could even climb with what you're announcing today as much as $3.6 billion. Is that correct?

Ted Mitchell:        So I think - yes. Those are the numbers. And I think that this is why we need to make sure - as Secretary Duncan has said - that as we go forward with these processes, we are able to put institutions on the hook as well as providing the relief that students are entitled to under the law.

And let's be clear, the law is what gives students the right to this kind of relief. And it's important for us to do everything that we can to make those laws work for borrowers and to do so in a way that also protects taxpayers.

Arne Duncan:        Again just to reiterate, we really don't know how many students will apply for this. So these are all, you know, top line numbers. But we will not know for a while what the take up rate is. So that's the big unknown at this point.

Dorie Nolt:            Next question, please.

Coordinator:          Thank you. Next question goes to Chris Kirkham with the Los Angeles Times. Go ahead.

Chris Kirkham:     Hi. Yes, so I just wanted to make sure I was - we were just being very clear on sort of going back in time on this loan forgiveness window - going back to last June. Who all are we talking about here? So is this not going to apply to schools that were sold to Zenith? Or so are these the schools that were the tea kettle schools as part of that agreement?

I just sort of - there's a lot of different scenarios here for what students went through. So I just want to make sure I'm crystal clear on who exactly that wasn't in the schools that closed in April, who are the new students who are able to apply for this?

Ted Mitchell:        So the - let me see if I can help clarify it. So the students who we're considering as a group today are the Heald College students who were enrolled in programs where we have findings of misrepresentation. And so that's the first in category.

Next are...

Arne Duncan:        And that are - maybe 81% of programs.

Ted Mitchell:        Eighty-one percent of the program.

Arne Duncan:        We don't have a hard count on students, but think we'll be commensurate or in that ball park of people.

Ted Mitchell:        Right. And then outside of that, Corinthian students can apply for - can make borrower defense claims whether their school was closed or not. And we believe that going forward Corinthian students will be able to present borrower defense claims.

And beyond that, other students will be able to create borrower defense claims as we build out our process under the guidance of the special master.

Chris Kirkham:     Okay. But for the loan discharge though, where the deadline got moved back...

Ted Mitchell:        Oh, yes, yes.

Chris Kirkham:     ...a couple of time. Yes.

Ted Mitchell:        Right. So those are for students who were enrolled in the schools that ultimately closed, but who were enrolled...

((Crosstalk))

Chris Kirkham:     So not...

Ted Mitchell:        ...in those schools prior to the 120 day period going back to June 20, 2014 when we signed the Memorandum of Understanding with Corinthian that led to their sale.

[Department official] :      And who did not or could not or chose not to complete their program at another school. This is John DePaulo - just to be overly clear. Schools that were sold to (unintelligible) are not closed schools.

Chris Kirkham:     Thanks.

Dorie Nolt:            Next question, please.

Coordinator:          Next question goes to Tamar Lewin from New York Times. Your line is open.

Tamar Lewin:        Hi. Can you - I know that Corinthian has a lot of debt. Are there any other parties that have been associated with this to whom you might look - be looking for some of the damages?

Ted Mitchell:        So thanks - thanks Tamar. This is Ted. So we are working aggressively within the bankruptcy process to satisfy (unintelligible) that we made.

Tamar Lewin:        Can you be a little more specific or no?

Ted Mitchell:        I don't think...

Man:                     Do you have a follow up question there?

Ted Mitchell:        Yes. I don't think that there are more specifics really.

Tamar Lewin:        Okay, thank you.

Dorie Nolt:            Next question.

Coordinator:          Next question goes to Janet Lorin from Bloomberg News. Go ahead.

Janet Lorin:           Hello. Do you have an estimate of how many students are eligible right now for debt relief now that the date has been pushed back to June of 2014?

Ted Mitchell:        Yes. We've been calculating that. We think it's 15,000 students.

Janet Lorin:           And do you have a dollar amount of how much that would cost?

Ted Mitchell:        No, not at this moment. And again, , you know, there too, it's indeterminate and will all be about the take up rate question of how many of those students have transferred their credits when they departed Corinthian. So that too is indeterminate and we'll learn as we go through this.

Janet Lorin:           But the high amount...

Dorie Nolt:            Next question.

Janet Lorin:           ...if everybody took it, it would be 3.6 billion.

Man:                     That - the 3.4 billion is...

((Crosstalk))

Man:                     ...earlier with the loan volume associated with Corinthian borrowers of the last five years.

Janet Lorin:           But if everybody took it up - took you up on that, that would be the high amount?

Man:                     So it wouldn't be that high because the window applied in this case is only from June 20, 2014 to present.

Ted Mitchell:        Also that number isn't (unintelligible). That number is all; right?

Dorie Nolt:            Hey guys, I can send everybody clarity on the numbers after the call just to make sure everyone has that. So I'll follow back up with everybody who was on the call. Let's move on to the next question unless you had something else Janet.

Janet Lorin:           No, thanks.

Dorie Nolt:            Okay.

Ted Mitchell:        Thanks, Janet.

Coordinator:          Thank you. Next question goes to Mandi Woodruff from Yahoo Finance. Your line is open.

Mandi Woodruff:  Hi. Good afternoon, and thanks everybody for answering these questions. My question - I know you've mentioned the accrediting agencies earlier, Ted. And I wonder if you have any plans to sit down with them and look into the way that they have been evaluating these schools. Heald for example was accredited by a really reputable or thought to be reputable regional accrediting agency in the western part of the states.

And that was sort of one of the banners that advertised a lot about and was supposed to be very reputable. What are your plans to sort of look into how these regional accreditors are evaluating for profit schools in the future?

Ted Mitchell:        So great question. We are talking to them actively. And quite honestly I think that accreditors need to wake up to what's going on around them in this part of their industry. And they need to develop stronger guidelines for how to manage their engagement with these large career colleges.

Mandi Woodruff:  Do you think that you maybe like might have relied on their evaluations a little too much I mean in terms of looking at the for profit schools?

Ted Mitchell:        So the whole question of how we work with states and how we work with accreditors is an open one and a good one. And I think that for our part we need to communicate more often and better with accrediting agencies and with states.

It's one of the reasons why I'm so encouraged by the increased conversation - level of conversation that we're having with states attorneys general on these and other matters.

Arne Duncan:        And to be clear, this is not like we relied on them too much. We did our own independent investigation. But (unintelligible) in places like this are, you know, passing accreditation with flying colors, we have prospects losing some credibility. And accreditors need to really, really take this seriously.

Dorie Nolt:            And I think (unintelligible) Secretary Duncan.

((Crosstalk))

Mandi Woodruff:  Okay, thank you.

Dorie Nolt:            We have time for one more question. This one I think the many (unintelligible) queue up. So can we get that question in please?

Coordinator:          Thank you. Next question goes to Allison Sherry from Minneapolis Star Tribune. Your line is open. Ms. Sherry, your line is open. Go ahead.

Allison Sherry:      Hello. I'm sorry. Thanks for taking my last question. Mr. Secretary, you were calling on Congress to take more action on for profits. And I wondered if you'd like to be more specific - if you had the chairman of the House and Senate Education Committees in the room, what you'd like them to do.

Arne Duncan:        Well I think we've been very clear and have a, you know, five or six year track record of - and to be very clear, we're supportive of for profits that are helping real people gain real skills that lead to better jobs. We want them to grow and to assert more students.

But where Congress has fought us every step of the way when we're just trying to bring some basic accountability to the industry, it's been a huge problem. And again what we're seeing in situations like Corinthian is just - it's indefensible.

And this is a wakeup call not just to the industry, but this has to be a wakeup call to Congress. And I'd be hard pressed to believe that folks on either side of the aisle want to stand behind guys where there is so much deception of students and waste of taxpayer dollars.

And so going back again to gainful employment, going back to bringing more resources so that we can do more investigative work here, Congress has to stop defending the status quo that's indefensible, and has to be part of the solution, not part of the problem.

And candidly, far too many members of both sides of the aisle up to this point have been part of the problem. The question is does this - is this a watershed moment? Is this a fork in the road where they begin to understand that, you know, bad actors simply can't be tolerated?

Allison Sherry:      Okay, thank you.

Dorie Nolt:            We have three more questions. We're going to take all of them.

Coordinator:          Thank you. Next question goes to Michael Shure from Al Jazeera America. Your line is open.

Michael Shure:      Yes, thanks for taking the question. You know many people who are observing this situation see Corinthian as the first domino to fall. Is this something that the Department looks at as precedent setting going forward if some of these other schools fail in the same way as Corinthian has?

Arne Duncan:        It's a great question. And sadly we think this will not be the last domino to fall, and that there may be more. And we're looking at this with an eye first to doing the right thing by the Corinthian students. But we're also - I try to be explicit in what I was saying.

We are also today trying to send a very clear message to this industry. And we're also trying to send a very clear message to Congress. And I wish we could say that, you know, Corinthian is the last of these situations. But that's not reality. That's not reality.

Ted Mitchell:        And this is Ted. And I'll just add to that, I think that this is one of the reasons that we are bringing in the special master and working with the special master to create a process that is durable, not just in the Corinthian case, but beyond Corinthian.

And to go back to the question about accreditation, I think that this is also one of the reasons why we have to work very hard to fix the broken accountability system so that we can focus on the front end part of this problem too, and not just be cleaning up the way we're doing today with Corinthian.

Michael Shure:      Thank you.

Ted Mitchell:        (Unintelligible), this is our first major statement and major action on this, but it obviously will not be our last. And we're going to continue to learn, to listen very carefully. This is new work that we have to do. Wish we didn't have to do this. Wish students weren't in a situation. But again this is very much a reality for far too many young people - far too many students around the country.

Dorie Nolt:            Okay, next question, please.

Coordinator:          Next question goes to Valerie McCabe from Al Jazeera America. Go ahead.

Valerie McCabe:   Hi. Sorry about that. I just have a really quick question. Have you actually (unintelligible)? And my second question is actually about how much money - I mean there was a certain period where the Department of Education gave Corinthian College $600 million while they were processing their bankruptcy. Why did that happen?

Arne Duncan:        So I'll take this first and hand it over to Ted in a second. But yes, there were absolutely members of Congress on both sides of the aisle who want to be constructive. There are candidly members of Congress who in the past defended these guys, and are starting now to really comprehend the debt - how indefensible that is.

So I am hopeful. But I listen to what people say. And I spend a lot of time watching what they actually do. This is not a time for congress to do a bunch of speeches. This is a time for Congress to act, and to act in a bipartisan way.

So you guys are reporters. Feel free to call what they say. I just hope you can hold folks accountable before they actually do something here or not. And they need to take much clearer action than they ever have in their history.

Ted Mitchell:        And on the second question, our agreement with Corinthian last June was that they would sell or close all of their schools. And in the interim we - under the supervision of a special monitor, (Patrick Fitzgerald), former US attorney, Corinthian operated their campuses again under the pretty strict supervision of (Pat Fitzgerald) and our team here at the Department.

Arne Duncan:        And just quickly, obviously many students were able to transfer, and to abide there. And our goal there - students were in school for a reason. They were in school because they wanted to gain skills. They wanted to climb the economic ladder. And we thought where possible for them to continue to stay in school, to graduate.

Many, many were within literally - thousand were within two months, three months, six months of graduating. The easy thing for us to thing to do would have been to shut down Corinthian back there - put all these students on the street with nothing to show for it.

We thought the right thing to do was to try and give them a chance to transport - to gain real skills that will help them climb the economic ladder.

Dorie Nolt:            Last question, please.

Coordinator:          Question goes to Alan Pyke from ThinkProgress. Your line is open.

Alan Pyke:            Hi, thanks. You guys have talked a lot about the importance of the ultimate take up rate to not to just what the final price tag of all this will be, but to how a larger proportion of the people who've been harmed here will get some relief from these debts.

You're also talking about all this information being passively available on the Web site. What is the plan to more actively inform the entire class of people or an over defined version of that class of people who might potentially be eligible for one or another of these forms of repayment defense? What's the plan to more actively inform them of those options?

Ted Mitchell:        Great question. We are - days following the closure of Corinthian, we sent out an email - our first email communication with all of those affected students. And we are continuing to try to reach out proactively to all of the students for whom we can find email addresses.

Alan Pyke:            But does that mean that there isn't a plan to send physical letters to everybody who's in the (unintelligible) or other databases as being part of this class of people who might potentially be eligible to file a claim even if they're not in the closed school discharge window that you've expanded back to last summer - even if they're in that second category of people who'd have a punitive claim to repayment - to defense repayment if they were defrauded?

Ted Mitchell:        Yes. So we're looking at a range of other options, and haven't settled on them yet.

Alan Pyke:            Okay, thanks.

Dorie Nolt:            Okay. That was the last question. If you have anything else you need, please email me or press@ed.gov. and I'll try and get you an answer.

Thank you for joining us today.

Coordinator:          That concludes today's conference. Thank you for your participation. You may now disconnect.

This article also appears on Republic Report