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Biden management says it will cancel federal student loans for about 560,000 debtors who attended. A chain of non-profit Corinthian colleges.
Under the new measure, hundreds of thousands of students who have now joined the defunct chain will receive $ 5.8 billion in full debt discharges – the largest of its kind History of the Department of Education.
“As of today, every student who has been deceived, deceived and pushed into debt by Corinthian colleges has the support of the Biden-Harris administration and can be sure that their federal student loans will be waived.” Education Secretary Miguel Cardona said in a statement. “For a very long time, he was involved in the total financial exploitation of Corinthian students and misled them into getting more and more debt to pay off promises they never kept.”
Thousands of former Corinthian students had already qualified for the loan cancellation, but they had to file documents and go through an application process, which lawyers say was confusing and not widely known.
The rest of the debt will be repaid, education officials said. Students with school debt will not qualify.
At its peak, Corinthian was one of the largest non-profit college institutions in the country, with more than 110,000 students on 100 campuses across the country.
The company closed in 2015 amid widespread findings of fraud. The Obama administration Many campuses were found to be falsifying data on the success of their graduates. In some cases, schools reported that students found work in their field of study, even though they worked in grocery stores or fast food chains.
Hundreds of students told investigators they were pressured to join with promises of lucrative employment, which would end up with huge sums of money and some job opportunities. Federal officials found that the company had lied about transferring students’ tuition to other colleges.
The lawsuit was probably funded by federal law and the Obama administration promised to forgive debt to Corinthian students, whose plans lied about job rates. But the explosion in debt forgiveness applications, coupled with political battles over the process, has created years of setbacks in the process, with many former Corinthian students still waiting for relief.
The announcement of the Biden administration comes as follows President Biden considers broad student debt forgiveness. In the campaign trail, Biden said he supports the forgiveness of $ 10,000 student loans to all borrowers. He later pointed out that such action should come through Congress, but the White House said it was considering whether it could proceed through executive action.
The Associated Press contributed to this report.