The Department of Education will automatically repay the arrears of more than 560,000 borrowers in the $ 5.8 billion federal student loan who attended any campus run by Corinthians College, a for-profit educational institution that was convicted of student fraud.
Vice President Kamala Harris will announce the group discharge this afternoon.
This is the second mass discharge of federal student loans accumulated by students participating in for-profit colleges in history, after the department discharged a group of 28,000 students attending the Marinello School of Beauty in April. The Corinthian Discharge is 20 times larger than the Marinello School, making it the largest group of student loan discharges in history.
Once one of the largest for-profit educational institutions, Corinthians enrolled approximately 110,000 students on 105 campuses in 2010.
Education Secretary Miguel Cardona said: “To this day, every student who has been deceived, deceived and driven by Corinthian colleges can be sure that the Biden-Harris administration is behind them and will release their federal student loans.” “For a very long time, Corinthians have been involved in wholesale financial exploitation of students, confusing them into borrowing more for the promise they will never keep.”
In 2013, Harris, then serving as California’s attorney general, sued Corinthians for hunting practices. Two years later, the Department of Education joined the investigation. Their joint investigation found that Corinthians misrepresented employment rates across hundreds of programs, confusing students about their job prospects after graduation.
In 2015, the Department of Education fined Corinthian colleges ভুল 30 million for misrepresenting job placement rates, for which the education company went bankrupt weeks later and closed 28 of its campuses, enrolling about 16,000 students at the time.
Following the closure of Corinthians, the federal government allowed students who had not completed their programs to apply for debt relief under the Repayment Act from Borrower Protection. However, due to the lack of communication between the Department of Education and the complex nature of the debtor-defense claims, many students did not know how to obtain such relief.
Corinthians is one of the many for-profit colleges that have been caught using deceptive advertising to make their programs appear more promising than they really are, to attract a weaker population, such as low-income and minority students, seniors or single mothers. , In their program.
A group of 15 alumni who were heavily indebted to Corinthian colleges went on strike in protest of their refusal to repay their student loans in order to raise awareness about the predatory practices of these students. The strike has reached more than 1,000 students who are being supported by the federal government to get rid of their debts.
Members of the group, who call themselves Corinthians 15, spoke to Debt Collective on Wednesday about the announcement, an organization that supports defaulters and helps Corinthian students apply for debt relief.
“I am just happy to be free, but the war is not over. We have a lot more to do, and at the end of the day, it took too long. I’ve been fighting for it for years, “said Latonia Sugus, one of the original Corinthians 15.
Although 100,000 Corinthian alumni have been able to get their debts forgiven through debtor-defense claims, the Biden administration’s move will allow students to have their debts automatically forgiven, without the borrower having to take any personal action.
Alumni Corinthians with outstanding debts can expect to receive a notification from the Department of Education that their outstanding debts will be redeemed. According to a senior Biden administration official, if borrowers still have outstanding balances, they will be reimbursed for their past payments. However, borrowers who have repaid their loans in full will not be repaid.