White House cancels $5.8B in student loans for former Corinthian College students
by Alex Gangitano - 06/01/22 6:49 PM ET
The Biden administration is planning to discharge all outstanding federal student loans borrowed by former Corinthian Colleges students, providing $5.8 billion in loan cancellations to 560,000 borrowers.
The group loan discharge applies to all former students who attended any campus owned or operated by Corinthian Colleges Inc. since the company was founded in 1995 through its closure in 2015.
The Hill first reported earlier on Wednesday that the Biden administration was planning to administer widespread relief for former Corinthian students, citing multiple sources.
Vice President Harris is expected to announce the measure on Thursday.
The Department of Education will notify former students of Corinthian in the coming weeks through a letter, and the actual discharges will follow in the months after. Borrowers will not have to take any actions to receive their discharges, and the discharge will not impact borrowers who have already fully repaid their loans.
“We’ve reached a determination that every borrower who attended Corinthian was subject to illegal conduct at Corinthian and at that point we have a variety of legal authorities available to us to discharge those loans,” a senior administration official said.
Corinthian faced multiple investigations and lawsuits for defrauding students out of millions in federally backed loans. Since Corinthian closed, advocates like Sen. Elizabeth Warren (D-Mass.) have called on the Education Department to provide relief to former students who faced some form of debt collection.
In 2016, when Harris was attorney general in California, her office obtained a $1.1 billion judgment against Corinthian Colleges for “their predatory and unlawful practices.”
Beginning in 2013, she filed suits seeking to stop the practices, which left thousands of students in debt with worthless degrees, alleging that Corinthian intentionally misrepresented information to students about job placement rates and was engaging in deceptive and false advertising and recruitment.
The senior administration official referenced the lawsuit by Harris’s office during her time as attorney general as the reason the college had to declare bankruptcy.
This announcement is the second group discharge from Biden administration’s Education Department. In April, it approved $238 million in loan discharges for former Marinello Schools of Beauty students.
So far, the total amount of loan relief granted by the Biden-Harris administration has grown to $25 billion since January 2021.
more
https://thehill.com/news/administration/3508869-white-house-cancels-5-8b-in-student-loans-for-former-corinthian-college-students/
