Former Corinthian students have erased federal student debt

The Biden administration has announced that the Biden administration has announced that hundreds of thousands of students who have visited the Corinthian Colleges commercial network will automatically cancel their federal student loans, aimed at closing one of the most notorious fraud cases in American higher education.

Under the new action, anyone who visited the now defunct network from its inception in 1995 until its collapse in 2015 will receive a cleanup of federal student debt. According to the agency, it wiped out $ 5.8 billion in debt to more than 560,000 borrowers, making it the largest loan repayment in the history of the Department of Education.

“To date, every student deceived, deceived and indebted to Corinthian colleges can be confident that the Biden-Harris administration will support them and pay off their federal student loans,” Education Minister Miguel Cardona said Wednesday. “For too long, Corinthians has been engaged in the wholesale financial exploitation of students, misleading them and taking on new and new debts to pay for promises they will never keep.”

Tens of thousands of former Corinthian students already had the right to write off the debt, but they had to apply and navigate the application process, which defenders say is confusing and not widely known. Now the benefit will be made automatically and extended to additional borrowers.

Those who have a balance on their Corinthian debt will also receive compensation for payments they have already made, education officials said. But the effect does not apply to loans that have already been fully repaid.

At the peak of its development, Corinthian was one of the nation’s largest commercial colleges with more than 100 campuses nationwide and more than 110,000 students at Everest, WyoTech and Heald schools.

But the campaign came to a halt in 2015 amid widespread allegations of fraud. The Obama administration – in collaboration with Kamala Harris, then California’s attorney general and later vice president – has found that dozens of campuses have falsified the success of their alumni. In some cases, schools reported that students found work in their fields of study, even if they worked in grocery stores or fast food chains.

Hundreds of students told investigators that they were pressured to enroll, promising lucrative jobs, but ended up getting huge amounts of debt and few job prospects. Federal officials also found that the company falsely informed students that their course credits could be transferred to other colleges.

The case sparked federal repression against nonprofit colleges, and the Obama administration has promised to forgive loans to Corinthian students whose programs lied about employment rates. The administration has expanded the process, known as borrower protection, to repayment, allowing any student fraudster to apply for debt relief.

But the explosion in the number of debt forgiveness applications as well as political battles over the process have led to a long lag in the process, leaving many former Corinthian students still waiting for relief.

As of December, the Department of Education reported that it had more than 109,000 pending applications from students who suspected fraud by their colleges, including many students from Corinth. Borrowers and their advocates have called on the government to clear all Corinthian debts, saying the evidence of wrongdoing was so widespread that all students of the network fell victim to fraud.

The administration has announced the action as President Joe Biden is considering a wider pardon of student loans for millions of Americans. As a candidate, Biden said he was in favor of forgiving student loans of $ 10,000 to all borrowers. He later noted that such actions should be passed through Congress, but the White House said it was considering whether to pursue them through the executive branch.

Lawyers said the Biden administration’s decision brings long-term justice.

“This is a huge student victory, and it belongs to the tens of thousands of borrowers who have been deceived and abused by Corinthian College,” said Eileen Connor, director of the Predatory Student Lending Project, which represents Corinthian students in litigation. “They never stopped fighting – for three administrations – for the justice they deserve under the law.”

Libby DeBlasio Webster, a senior lawyer with the propaganda group Student Defense, said the news gave a “new start” to former Corinthian students, but she noted that many deceived students from other nonprofit colleges were still waiting for help.

“We also hope that today’s news is a sign that other solutions are on the horizon for thousands of students with a similar situation who expect this kind of relief,” she said.

Copyright © 2022 The Washington Times, LLC.

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