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The Biden administration says it will cancel federal student loans for some 560,000 borrowers who attended the Corinthian Colleges for-profit chain.
Under the new action, hundreds of thousands of students who attended the missing chain will receive $ 5.8 billion in full loan downloads, the largest of its kind in the Department of Education’s history.
The Secretary of Education, Miguel Cardona, speaks during the event of national and state teachers of the year at the White House, on April 27, 2022. (Photo AP / Susan Walsh, file)
“As of today, all students cheated, scammed 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,” the education secretary said. , Miguel Cardona, in a statement. “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.”
Thousands of Corinthian alumni were already eligible for debt cancellation, but they had to go through paperwork and go through an application process that, according to advocates, is confusing and not widely known.
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Those with a remaining balance of their debt will also receive repayments of payments they have already made, Department of Education officials said. Students who have paid off their school loans will not be eligible.
At its peak, Corinthian was one of the largest for-profit university companies in the country, with more than 110,000 in 100 campuses nationwide.
The company closed in 2015 amid widespread fraud findings. The Obama administration found that dozens of campuses were falsifying data on the success of its graduates. In some cases, schools reported that students had found work in their fields of study even though they worked in grocery stores or fast food chains.
Prospective college students tour the University of Chicago campus in Chicago on June 24, 2013. (Photo AP / Jon Elswick)
Hundreds of students told researchers that they were pressured to enroll with promises of lucrative employment, only to end up with large sums of debt and few job prospects. Federal officials also found that the company falsely told students that their course credits could be transferred to other universities.
The case sparked federal crackdown and the Obama administration promised to forgive loans to Corinthian students whose programs lied about employment rates. But an explosion of debt forgiveness applications, along with political battles over the process, created a delay in the process, leaving many former Corinthian students still waiting for relief.
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The Biden administration’s announcement comes when President Biden considers a broader student loan forgiveness. During the campaign, Biden said he supported forgiving $ 10,000 in student loans for all borrowers. He later indicated that this action should go through Congress, but the White House has said it is considering whether to carry it out through executive action.
The Associated Press contributed to this report.