Testimony of Tariq Habash Before the Maryland Senate Education, Health, and Environmental Affairs Committee
Institutions of Postsecondary Education – Disorderly School Closures
February 12, 2020
Chairman Pinsky, Vice Chairwoman Kagan, and Members of the Committee:
Thank you for the opportunity to testify in favor of SB 446 which defines and addresses some of the most critical elements affecting students in the event of a disorderly school closure.
My name is Tariq Habash, and I am the Head of Investigations at the Student Borrower Protection Center, a national nonprofit advocacy and research organization focused on the impact of student debt across Maryland and the rest of the country. And one of the biggest ways students are negatively affected by student debt is when that debt does not pay off.
In the last five years, school closings have wreaked financial havoc on thousands of students across Maryland. Students are often left with mountains of debt and no degree, or the realization that their diploma may not be worth the amount of debt they are still responsible for paying off. Schools like Corinthian, Argosy, ITT Tech, and The Art Institutes all closed down and left students with burdensome debt and no real transfer options.
The fallout from this debt goes beyond federal student loans; the impact is bigger. These predatory schools created institutionally held debt and then partnered with financial companies to continue collecting money long after these schools shut their doors. And these companies got off scot free. This needs to end.
SB 446 takes a stand for Maryland students—it says you cannot shut your doors overnight and still collect on the debt you created, getting rich off the backs of students with no recourse.
At the federal level, students have some protections—they can have their federal loans discharged when a school closes. SB 446 extends those protections to cover private debts created and guaranteed by the closed institutions, so students are not on the hook if those schools leave their students with no options.
SB 446 also creates strong protections to ensure that if a school does close, the student still has the opportunity to transfer their credits so they don’t have to start over. This protection creates
important improvements so that students are guaranteed either high-quality transfer options or the ability to discharge their financial liability, in the event that the closing school cannot produce a sufficient transfer option.
These guidelines are critical to minimizing the financial harm affecting students when schools abruptly shut their doors. SB 446 provides needed policy solutions to protect students from these disorderly closures. Thank you for your time.