Teachers line up to enter Everest College, one of the closing Corinthian colleges, for a meeting and opportunity to pick up their personal belongings at City of Industry, California, on April 27. 2015.
Al Seib | Los Angeles Times Getty Images
The Biden administration plans to cancel all outstanding student loans for those attending Corinthian Colleges, formerly one of the largest for-profit education companies, the U.S. Department of Education announced Wednesday.
Schools have been accused of predatory and illegal practices and have faced lawsuits from the Office of Consumer Financial Protection and Vice President Kamala Harris when he was Attorney General of California. The company filed for bankruptcy in Chapter 11 in 2015.
Some 560,000 borrowers will benefit from debt cancellation, which will reach about $ 5.8 billion. This is the largest debt forgiveness action by the government to date.
“As of today, all students cheated, swindled, and indebted by Corinthian Colleges can be assured that the Biden-Harris administration will turn its back on them and pay off their federal student loans,” said the secretary of ‘Education of the United States, 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 student loan balance should be repaid for previous payments made on their debt, senior government officials said Wednesday.
The relief should be automatic, they added, meaning borrowers will not have to browse for any paperwork or apply for it. Qualified borrowers are expected to be notified within a few weeks.
“Many borrowers have been waiting for years for their applications to be processed,” said higher education expert Mark Kantrowitz. “They will no longer be waiting 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 is pondering whether to move forward with the forgiveness of broad-based student loans. More recently, officials were inclined to remove the $ 10,000 for all borrowers earning less than $ 150,000, but an administration spokesman said they have not yet made a decision.