NEW YORK (MainStreet) — As the calendar turned from February to March, higher education observers have watched for movement in the showdown between the Department of Education (ED), which manages federal student loans, and students at a failing for-profit college who want their loans to be forgiven.

Student and consumer advocates are behind a group of 15 Corinthian College students who refuse to pay back their federal loans. But U.S. Senators and now the Justice Department have apparently aligned with them also. If ED digs in its heels, it risks being made to look like an apologist for a school whose programs have been condemned by the Consumer Financial Protection Bureau.

As part of the deal for Corinthian to sell half its 108 campuses to Zenith Group, a new non-profit career college chain owned by student loan debt collector ECMC Group, the Consumer Financial Protection Bureau won a $480 write off of the proprietary Genesis loans made by Corinthian to its students, worth $480 million.

CFPB director Richard Cordray said that it “was a tremendously successful result for many thousands of young people and their families that had been seriously harmed by Corinthian’s deceptive marketing.”

But the $480 million just covers the Genesis loans—not the federal loans Corinthian students borrowed from ED. Students and their advocates claim that since Corinthian was the purveyor of nearly worthless credentials, these loans should be written off as well.

Last spring an organization called the Rolling Jubilee Debt Collective, which grew out of the Occupy Wall Street movement of 2011, began buying up Corinthian debt from debt collectors at huge discounts—and retiring the debt. Since then it has organized the Corinthian debt strike.

The Debt Collective says that the Department of Education is an enabler of what it calls Corinthian’s “predatory empire,” which it says “pushed hundreds of thousands into a debt trap.” The Corinthian 15, as the strikers have been called, are refusing to pay back their federal loans.

Last year, 13 Senate Democrats called on ED to forgive Corinthian federal student loan debt. In a December 9 letter, signed by Tammy Baldwin (D-Wis.), Barbara Boxer (D-Calif.), Dick Durbin (D-Ill.) Al Franken (D-Minn.), Jack Reed (D-R.I.) and Elizabeth Warren (D-Mass.) and nine others, the senators asked, "What plans does ED have for granting group discharges to borrowers who are covered by lawsuits brought against colleges by state or Federal agencies?" In a single stroke, the 13 Senators seem to have given suits brought by state attorneys general parity with federal actions.

What's more, another branch of the federal government has said that ED has the power to forgive federal student loans where students can show that their schools defrauded them. Attorneys for Department of Justice have said that Education Secretary Arne Duncan has "complete discretion" to write off loans at schools where students were victims of fraud--even if there is no request for a loan write-off from the borrowers themselves.

Last month, ED said no dice.

”As we continue our conversations with students and advocates about options for borrowers, we also encourage borrowers to continue paying their student loans and to explore the various income-based repayment options offered by the Department in order to avoid risking serious consequences,” said ED spokesperson Denise Horn. Those consequences include loan defaults and big hits to the borrowers’ credit scores.

The back story concerns billions of dollars that ED would lose if the write-offs were allowed--and whether that would turn students at Corinthians's remaining 56 colleges into student loan refuseniks. When debt-striking Corinthian students--or others who have quietly decided not to repay--will start getting calls from debt collectors remains to be seen.

--Written by John Sandman for MainStreet