The Department of Education announced this Wednesday that it will condone in premaining student loans to more than half a million students who attended and were defrauded by any campus owned of Corinthian Collegesthe for-profit education chain that closed in 2015.
How much of the debt will be forgiven?
This forgiveness, the largest in the history of the department of student loans, will benefit some 560,000 borrowers for a total of $5.8 billion. Defrauded students do not have to apply for a borrower’s defense discharge; the department says it will discharge the loans without “any further action on your part.”
- All students who attended a Corinthian Colleges-owned institution from the time it was founded in 1995 to the time it closed in 2015 are eligible for forgiveness.
- According to the Department of Education, Corinthian Colleges misrepresented graduates’ employment prospects, their job placement rates, and the portability of their credits.
- In 2016, then-California Attorney General and current Vice President Kamala Harris won a $1.1 billion judgment against Corinthian for consumer fraud.
- The Education Department says it will notify students who attended Corinthian of the decision by email soon, and the actual discharge of loans will follow in the coming months.
federal student loans
While this cancellation takes place, President Joe Biden is studying the possibility of forgiving up to $10,000 of federal student loan debt to university students.
Biden said in April that he would have a decision on larger-scale student loan discharge “in the coming weeks.” Since then he has given no further public information on any decision.
- To date, Biden has forgiven more student loan debt than any other president, totaling $25 billion since January 2021, according to the Department of Education.
- All of the forgiveness has gone to students who were defrauded or who qualify for debt forgiveness under a program like Public Service Loan Forgiveness.
- Borrowers who believe they have been misled by their academic institution can file Borrower Defense Claims through the Department of Education, which could lead to debt cancellation.
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