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Education Department Approves dollar5.8 Billion Group Discharge to Cancel all Remaining Loans for 560,000 Borrowers who Attended Corinthian

Categories: US Education News

Today, the U.S. Department of Education (Department) announced it will discharge all remaining federal student loans borrowed to attend any campus owned or operated by Corinthian Colleges Inc. (Corinthian) from its founding in 1995 through its closure in April 2015. This will result in 560,000 borrowers receiving $5.8 billion in full loan discharges. This includes borrowers who have not yet applied for a borrower defense discharge, who will have their Corinthian loans discharged without any additional action on their part. The action is the largest single loan discharge the Department has made in history. Providing this targeted relief is part of the Biden-Harris Administration's continued commitment to helping borrowers who are struggling the most by ensuring discharge programs provide borrowers the complete relief to which they are entitled. Today's action brings the total loan relief the Biden-Harris Administration has approved for borrowers to $25 billion since January 2021.

The announcement today builds upon conclusions first reached by the Department of Education in 2015 that Corinthian engaged in widespread and pervasive misrepresentations related to a borrower's employment prospects, including guarantees they would find a job. Corinthian also made pervasive misstatements to prospective students about the ability to transfer credits and falsified their public job placement rates. Founded in 1995, Corinthian acquired several troubled private for-profit colleges across the country. At its peak in 2010, it enrolled more than 110,000 students at 105 campuses.Then-California Attorney General Kamala Harris' investigation into Corinthian played a key role in developing findings against the for-profit college chain and the Department's overall work to discharge the loans of borrowers who were harmed by its wrongdoing, a process that has helped cancel the loans of around 100,000 borrowers to date.

"As of today, every student deceived, defrauded, and driven into debt by Corinthian Colleges can rest assured that the Biden-Harris administration has their back and will discharge their federal student loans," said U.S. Secretary of Education Miguel Cardona. "For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep. While our actions today will relieve Corinthian Colleges' victims of their burdens, the Department of Education is actively ramping up oversight to better protect today's students from tactics and make sure that for-profit institutions – and the corporations that own them – never again get away with such abuse."

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