Teachers gathered to go to Everest College, one of Corinthian Colleges that had closed, to meet and collect their personal items in City of Industry (Calif.), April 27, 2015.
Al Seib | Los Angeles Times | Getty Images
According to Wednesday’s announcement from the U.S. Department of Education on Wednesday, the Biden administration will cancel any outstanding student loans for Corinthian Colleges students. This was a former for-profit education company.
Schools were accused of unlawful and predatory practices and have faced lawsuits from both the Consumer Financial Protection Bureau and Vice President Kamala Kamala Harris, when she was attorney-general of California. In 2015, the company filed for Chapter 11 bankruptcy.
A total of $5.8 Billion will be paid to debt cancellation benefits for 560,000 borrowers. This is the largest single debt forgiveness initiative by the government.
U.S. Secretary for Education Miguel Cardona stated in a statement that “as of today every student who was deceived, defrauded and driven into debt through Corinthian Colleges has the right to rest assured that Biden-Harris administration has had their backs and will discharge their federal student loan.”
Corinthian was established in 1995 and had more than 100,000 students on 100 campuses by 2010.
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Senior officials from the administration said Wednesday that any student who has a student loan balance must be refunded any previous payments.
They said that relief should be instantaneous, meaning that borrowers will not need to fill out paperwork or apply. In the next few weeks, qualified borrowers will be notified.
Mark Kantrowitz, a higher-education expert, stated that “many borrowers have waited for years and years for the processing of their applications.” They won’t be left waiting in limbo any longer.
The Biden administration has so far approved $25 billion of loan forgiveness for 1.3million borrowers.
This comes as the White House considers whether to forgo broad-based student loan forgiveness. Recently, officials had suggested that $10,000 be taken away from all borrowers with incomes below $150,000. But, a spokesperson said that the administration has not made any decisions yet.