June 3, 2022: -The Biden administration is planning to cancel all the student loans for those who attended schools under Corinthian Colleges, formerly one of the substantial for-profit education firms, the U.S. Department of Education announced on Wednesday.
The schools are accused of predatory and unlawful practices and went through lawsuits from the Consumer Financial Protection Bureau and Vice President Kamala Harris. At the same time, she was the attorney general of California.
Approximately 560,000 borrowers are spared from the debt cancellation, which will cost roughly $5.8 billion. That’s the most potent single debt forgiveness action taken by the government.
“Today, every student deceived, defrauded, and driven into debt by Corinthian Colleges can rest assured that the Biden-Harris administration has their back and will discharge their federal student loans,” U.S. Secretary of Education Miguel Cardona said.
Corinthian was established in 1995, and it had enrolled over 100,000 students across 100 campuses by the year 2010.
Former students of the colleges who still have a student loan balance should be refunded for the last payments made on their debt, senior administration officials said on Wednesday.
They added that the relief should be automatic, suggesting borrowers won’t need to move any paperwork or apply. Qualifying borrowers are expected to be notified within weeks.
The Biden administration has surpassed $25 billion in loan forgiveness for 1.3 million borrowers.
The announcement comes as the White House is mulling and moving ahead with broad-based student loan forgiveness. Currently, officials were leaning toward wiping out $10,000 for all borrowers who make a profit of less than $150,000, but the final decision has not come yet, says a spokesperson.