Hundreds of thousands of students attending Corinthian Colleges’ nonprofit will automatically have their federal student loans canceled, the Biden administration announced on Wednesday, a move aimed at closing one of the cases. most notorious fraud in American higher education.
Under the new action, anyone who attended the chain that disappeared from its founding in 1995 until its collapse in 2015 will have its federal student debt cleared. It will clear $ 5.8 billion in debt for more than 560,000 borrowers, the largest loan discharge in the Department of Education’s history, according to the agency.
“As of today, all students cheated, scammed and indebted by Corinthian Colleges can be sure that the Biden-Harris Administration will turn its back on them and pay off their federal student loans,” the education secretary said. , Miguel Cardona. “For too long, Corinthian has been engaged in the wholesale financial exploitation of students, deceiving them into getting more and more into debt to pay off promises they would never keep.”
Tens of thousands of former Corinthian students were already eligible for debt cancellation, but they had to go through paperwork and navigate through an application process that advocates say is confusing and not well known. Now, the relief will be done automatically and extended to additional borrowers.
Those with a remaining balance of their Corinthian debt will also receive repayments of payments they have already made, Department of Education officials said. But the action does not apply to loans that have already been repaid in full.