Ed. Dept. Cancels Debts For All Corinthian College Students, Wipes Out $6B of Unpaid Loans

The Department of Education yesterday announced it was canceling $5.8 billion of unpaid student loans taken out by individuals who attended Corinthian Colleges, wiping out the debts for more than 560,000 borrowers in what the department called the “largest single loan discharge” in its history.

Issues with Corinthian Colleges date back almost a decade, when Vice President Kamala Harris — then the Attorney General of California — sued the school for allegedly lying about placement rates for graduates and making false and deceptive representations to prospective students. Corinthian started shutting its schools down in 2014, with the rest being closed a year later, and the federal government has been dealing with the fallout of unpaid student loans ever since. It has been forgiving loans for those who attended Corinthian Colleges in bunches dating back to 2017, but the previous administration was called out and sued for not processing forgiveness applications fast enough.

Yesterday’s announcement includes those who have already filed for borrower defense discharges, as well as those who have not yet applied to have their loans forgiven.

The Education Department noted it has approved $25 billion in loan relief to individuals since President Biden took office 18 months ago.

“As of today, every student deceived, defrauded, and driven into debt by Corinthian Colleges can rest assured that the Biden-Harris administration has their back and will discharge their federal student loans,” said Secretary of Education Miguel Cardona in a statement. “For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep. While our actions today will relieve Corinthian Colleges’ victims of their burdens, the Department of Education is actively ramping up oversight to better protect today’s students from tactics and make sure that for-profit institutions – and the corporations that own them – never again get away with such abuse.”

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