Biden administration to cancel student debt for half a million Corinthian College students
Teachers line up to enter Everest College, one of the Corinthian colleges that has closed, for a meeting and a chance to collect their personal items, in City of Industry, California, April 27, 2015.
Al Seib | Los Angeles Times | Getty Images
The Biden administration plans to cancel all outstanding student loans for those attending schools operated by Corinthian Colleges, formerly one of the largest for-profit education companies, the US Department of Education announced on Wednesday. .
The schools have been accused of predatory and illegal practices and faced legal action from the Consumer Financial Protection Bureau as well as Vice President Kamala Harris when she was California Attorney General. The company filed for Chapter 11 bankruptcy in 2015.
About 560,000 borrowers are expected to benefit from the debt cancellation, which will amount to about $5.8 billion. This is the largest debt cancellation measure taken by the government to date.
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“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, in a press release.
Corinthian was founded in 1995, and by 2010 had enrolled over 100,000 students at 100 campuses.
Former college students who still have a student loan balance should be reimbursed for previous payments made on their debt, senior administration officials said Wednesday.
Relief should be automatic, they added, meaning borrowers won’t need to wade through documents or apply. Eligible borrowers should be notified within weeks.
“Many borrowers have been waiting years and years for their applications to be processed,” said higher education expert Mark Kantrowitz. “They will no longer wait in limbo.”
To date, the Biden administration has approved $25 billion in loan forgiveness for 1.3 million borrowers.
The news comes as the White House considers whether to move forward with a broad student loan forgiveness. More recently, officials were leaning toward waiving $10,000 for all borrowers who earn less than $150,000, but an administration spokesperson said they haven’t made a decision yet.