Corinthian Colleges student loan forgiveness: Debt erased for alumni

Anyone who borrowed money to attend a school owned by Corinthian Colleges – a for-profit institution with a long…

Anyone who borrowed money to attend a school owned by Corinthian Colleges – a for-profit institution with a long history of defrauding students before its sudden closure in 2015 – will have their federal student loans canceled. 

The mass discharge is the largest amount of debt the federal government has erased in one action benefitting more than a half million borrowers to the tune of $5.8 billion.

“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,” said Education Secretary Miguel Cardona.

Corinthian Colleges opened in 1995. Based in California with campuses nationally, the colleges closed in 2015 after the Education Department cut off the for-profit institution’s ability to access federal money. But borrowers who had attended the college sometimes still struggled to get their loans discharged.

The cancellation of the Corinthian College debt also comes as the President Biden considers wider student loan forgiveness, and payments on federal student loans remain frozen. That pause is set to lift at the end of August. 

About 41 million borrowers benefit from the pause, and the Education Department has estimated it saves them about $5 billion a month.

Vice President Kamala Harris is expected to formally announce the debt cancellation on Thursday at the Education Department. She has a history with Corinthian Colleges.

As California’s state attorney general, Harris secured a judgement against the institution in 2016 that resulted in $1.1 billion in relief for former students. The original complaint, filed in 2013, alleged the school targeted poor Californians via ads and marketing campaigns that misrepresented the likelihood of students finding jobs.