Under a new plan announced Monday by the U.S. Department of Education, the federal government will wipe out the bulk of the student loan debt of those who attended the now-defunct Corinthian Colleges.
Federal and state investigations concluded that the Santa Ana, California-based for-profit school system had charged exorbitant fees and made false claims about the job prospects for its graduates. The Education Department restricted Corinthian’s access to federal aid last June. Corinthian closed some of its schools and sold off others before filing for bankruptcy in April.
About 350,000 student borrowers took out $3.5 billion in federal loans to attend Corinthian Colleges since 2010 and until Monday only about 16,000 students ― those that attended schools that closed in April ― had been eligible for debt forgiveness. The law already provides for debt relief for students of schools that close, but they have to apply within 120 days.
The new plan expands debt relief to students who attended a now-closed school as far back as a year ago. It also streamlines the process for students whose schools were sold but believe they were victims of fraud.
“We will make this process as easy as possible for them, including by considering claims in groups wherever possible, and hold institutions accountable,” Education Secretary Arne Duncan said in a statement.
Students can find details at studentaid.gov/Corinthian.
