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Biden administration cancels all loans for Corinthian College students

Biden administration cancels all loans for Corinthian College students
Secretary of Education Miguel Cardona said the discharge will save 560,000 borrowers a total of $5.8 billion. File Photo by Bonnie Cash/UPI | License Photo

June 1 (UPI) -- The Department of Education announced Wednesday it will forgive all remaining federal loans students borrowed to attend any campus operated by Corinthian Colleges.

The department said it is the largest single loan discharge in its history and will save 560,000 borrowers a total of $5.8 billion after an investigation revealed the company deceived students.

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The department said Corinthian falsified its colleges' public job placement rates and guaranteed jobs to borrowers. Corinthian also made misstatements to prospective students about the ability to transfer credits.

Corinthian was founded in 1995 and at its peak in 2010, enrolled more than 110,000 students at 105 campuses until it closed in April 2015.

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In 2016, then-California Attorney General Kamala Harris and the state of California obtained a $1 billion judgment against Corinthian. The judge found the company misrepresented job placement rates, while engaging in false advertising and deceptive recruitment.

"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," Secretary of Education Miguel Cardona said.

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"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."

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Corinthian students can expect to hear from the department in the next few weeks to notify them of the decision. The department said actual loan discharges should follow in a few months. Borrowers do not have to take any actions to cancel their loans.

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