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The Biden administration says it will cancel federal student loans for about 560,000 borrowers who have visited the Corinthian Colleges at a profit.
Under the new action, hundreds of thousands of students who have visited the non-existent chain will receive $ 5.8 billion in full loan waivers – the largest of its kind in the history of the Department of Education.
Education Minister Miguel Cardona speaks at the National and State Teachers of the Year event at the White House, April 27, 2022 (AP Photo / Susan Walsh, File)
“As of today, any student who has been deceived, deceived and indebted to Corinthian Colleges can rest assured that the Biden-Harris administration has its back and will pay off their federal student loans,” Education Minister Miguel Cardona said in a statement. “For too long, Corinthian has been involved in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they will never keep.
Thousands of former Corinthian students were already eligible for debt cancellation, but had to apply and navigate the application process, which advocates say is confusing and not widely known.
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Those who have outstanding debt will also receive a refund of payments already made, education officials said. Students who have repaid their school loans will not be eligible.
At its peak, Corinthian was one of the largest profitable college companies in the country, with more than 110,000 on 100 campuses across the country.
The company was closed in 2015 amid widespread fraud. The Obama administration has found that dozens of campuses are falsifying data on the success of their alumni. In some cases, schools report that students have found work in their fields of study, even though they work in grocery stores or fast food chains.
Prospective students take a tour of the University of Chicago campus in Chicago on June 24, 2013 (AP Photo / Jon Elswick)
Hundreds of students told investigators that they were pressured to sign up with promises of lucrative jobs, only to find themselves with huge sums of debt and few job prospects. Federal officials also found that the company incorrectly told students that their course credits could be transferred to other colleges.
The case sparked federal repression, and the Obama administration promised to forgive loans to Corinthian students whose programs lied about job levels. But the explosion in debt forgiveness petitions, along with the political battles over the process, have left the process behind for years, leaving many former Corinthian students still waiting for relief.
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The Biden administration’s announcement comes as President Biden is considering a broader student loan waiver. During the campaign, Biden said he supported the forgiveness of $ 10,000 in student loans for all borrowers. He later said that such action should be taken to Congress, but the White House said it was considering whether to take it through executive action.
The Associated Press contributed to this report.
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