Biden administration writes off $5.8 billion in student loan debt for people who attended Corinthian Colleges

Hundreds of thousands of students who attended the for-profit chain Corinthian Colleges will automatically get their canceled federal student loansthe Biden administration announced on Wednesday a move that seeks to end one of the most notorious cases of fraud in American higher education.

Under the new action, anyone who participated in the now-defunct chain from its founding in 1995 until its collapse in 2015 will have their federal student debt erased. It will clear $5.8 billion in debt for more than 560,000 borrowers, the largest single loan discharge in the Department of Education’s history, according to the agency.

“Starting today, every student deceived, swindled and indebted by Corinthian colleges can be assured that the Biden-Harris administration has their backs and will pay their federal student loans,” the secretary said. Education, Miguel Cardona. “For too long, Corinthian has engaged in the large-scale financial exploitation of students, driving them into deeper and deeper debt to pay for promises they would never keep.”

Tens of thousands of former Corinthian students were already eligible for debt cancellation, but they had to file documents and navigate an application process that advocates say is confusing and little known. From now on, the succession will be made automatic and extended to other borrowers.

Those with a remaining balance on their Corinthian debt will also receive refunds on payments they have already made, Education Ministry officials said. But the action does not apply to loans that have already been fully repaid.

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