Teachers line up to enter Everest College, one of the closed Corinthian colleges, to meet and collect personal belongings at the City of Industry, California, April 27, 2015.
Al Saib | Los Angeles Times Getty Images
The Biden administration plans to cancel all outstanding student loans for those who attended Corinthian College, a former one of the largest for-profit education companies, the U.S. Department of Education said Wednesday.
Schools have been accused of predatory and illegal practices and have faced lawsuits from the Consumer Financial Protection Bureau and Vice President Kamala Harris when she was California’s attorney general. The company filed for bankruptcy under Chapter 11 in 2015.
About 560,000 borrowers will benefit from debt cancellation, which will reach about $ 5.8 billion. This is the largest one-off debt forgiveness action taken by the government to date.
“As of today, any student deceived, deceived and indebted by Corinthian Colleges can rest assured that the Biden-Harris administration has its back and will repay their federal student loans,” said US Education Secretary Miguel Cardona in a statement. .
Corinthian was founded in 1995 and by 2010 had enrolled more than 100,000 students on 100 campuses.
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Former college students who still have a balance of student loans must be reimbursed for previous payments made on their debt, senior administration officials said on Wednesday.
The relief should be automatic, they added, which means that borrowers will not have to navigate documents or apply. Qualified borrowers are expected to be notified within weeks.
“Many borrowers have been waiting years and years for their applications to be processed,” said higher education expert Mark Cantrowitz. “They will no longer wait in obscurity.”
To date, the Biden administration has approved a $ 25 billion loan forgiveness for 1.3 million borrowers.
The news comes when the White House is considering whether to proceed with a large-scale forgiveness of student loans. Most recently, officials sought to delete $ 10,000 for all borrowers earning less than $ 150,000, but a spokesman for the administration said no decision had been reached yet.
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