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Department of Education Forgives $5.8 Billion of Corinthian College Debt

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The US Department of Education is wiping the slate clean for 560,000 students who borrowed money to attend Corinthian College. The agency announced that it was repaying all of those students’ remaining federal student loans, an amount that equates to $5.8 billion.

The department said the release will include everyone, even borrowers who have not yet requested a borrower defense release. The discharge will be done automatically without any additional action on the part of the borrowers.

Solve a long-standing problem

It took almost three administrations to get there, but Corinthian students have the Biden-Harris White House to thank for their loan releases. Officials cited an ongoing commitment to helping student borrowers get the relief to which they are entitled. With Corinthian action on the books, the administration approved $25 billion in loan relief.

Bringing Corinthian to justice has been a personal crusade for Vice President Harris. She sued the institution when she was California attorney general in 2013, claiming the for-profit college deliberately misrepresented its placement rates and engaged in misleading and false advertising and recruiting.

“Starting today, every student deceived, defrauded, and indebted by Corinthian colleges can be assured that the Biden-Harris administration has their back and will repay their federal student loans,” the U.S. Secretary of Education said. Miguel Cardona.

“For too long, Corinthian has engaged in the large-scale financial exploitation of students, driving them deeper and deeper into debt to pay for promises they would never keep. As our actions today will bring relief Corinthian Colleges’ victims of their burdens, the Department of Education is actively stepping up surveillance to better protect today’s students from the tactics and ensure that for-profit institutions – and the companies that own them – do not s will never get away with such abuse again.”

The Department says it’s not over

The Department of Education has made it clear that its efforts to clean up the whole student loan mess don’t stop there. Last week it announced an overhaul of its student loan program in hopes of offering students and borrowers a full range of benefits, including loan releases.

If it holds, the promises made by the Department could change the student loan industry forever – from making student loans more affordable to preventing a future debt crisis to holding colleges accountable for leaving students with mountains. debt and without good jobs.

The Department also recently announced fixes to long-standing income-contingent repayment issues that will help thousands of borrowers qualify for forgiveness through this program, as well as 40,000 borrowers who qualify for public service loan forgiveness (PSLF).