The Biden administrator is forgiving all outstanding loans held by students who attended Corinthian Colleges, which — at $5.8 billion — amounts to the largest single action of debt cancellation ever by the federal government.— Kyle Griffin (@kylegriffin1) June 2, 2022
The U.S. Department of Education (ED) announced the news on Wednesday, outright declaring that it wound “approve loan discharges for borrowers harmed by Corinthian’s wrongdoing,” a $5.8B initiative that will impact about 560,000 people.
Notably, this is the ED‘s “largest single loan discharge” ever, and it contributes to the $25B in student debt relief the Biden-Harris Administration has had since January 2021.
“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,” U.S. Secretary of Education Miguel Cardona said. “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,” he added.
Breaking: ED will cancel $5.8 billion in federal student loans for 560,000 borrowers who attended Corinthian Colleges – the largest single loan discharge ED has made in history. https://t.co/gpYgv6Tu9W
Here’s a timeline of how this discharge came about: [ 🧵 ⬇️ ] pic.twitter.com/lnq4WxaHTC
— U.S. Department of Education (@usedgov) June 1, 2022
Founded in 1995, Corinthian grew into a powerhouse by “acquir[ing] several troubled private for-profit colleges across the country.” By 2010, it enrolled over 110,000 students across 105 different campuses.
In 2013, then-California Attorney General Kamala Harris helped spearhead an investigation into Corinthian, calling out its unsavory practices. The organization filed for bankruptcy and dissolved in 2015, and Harris obtained a $1.1B judgment against the “predatory for-profit school operator” just a year later.
“For years, Corinthian profited off the backs of poor people — now they have to pay. This judgment sends a clear message: there is a cost to this kind of predatory conduct,” Harris said at the time. “My office will continue to do everything in our power to help these vulnerable students obtain all available relief as they work to achieve their academic and professional goals.”
Now, students defrauded by Corinthian Colleges have fortunately received another game-changing win.