It's been a long road for former students of Corinthian Colleges, a chain of for-profit schools that closed in 2015 after the U.S. Department of Education found Corinthian had misrepresented borrowers' future job prospects.
Students took on debt based on those false promises â€" and saw it all forgiven this week when the DOE announced the discharge of $5.8 billion in student loans for 560,000 borrowers affected by Corinthian's deceptive practices. This is the largest single loan discharge in U.S. history, according to the DOE.
Corinthian Colleges had more than 110,000 students enrolled across 105 campuses in 2010 at its height. After the 2015 findings, the school sold or closed all its campuses, which included schools under the names of Heald, Everest and WyoTech.
The plan to discharge nearly $6 billion in student loans originated in 2013, when California's then-attorney general, Kamala Harris, sued Corinthian for deceptive advertising and recruiting practices.
The DOE followed up on Harris' case with its own findings in 2015, determining that Corinthian made 'pervasive misrepresentations related to a borrower's employment prospects, including guarantees they would find a job.' Corinthian also effectively lied about students' ability to transfer credits and its own public job placement rates.
The Department's findings allowed borrowers to apply for 'borrower defense', a provision that, if approved, allows a defrauded student to receive loan cancellation. Around 100,000 borrowers have had their loans canceled because of the provision, according to the DOE. Thousands of other borrowers may also be eligible for automatic student loan forgiveness.
This most recent move enables borrowers who have yet to apply for borrower defense to have their loans canceled.
Next Steps for Corinthian Students
What do former, defrauded Corinthian students need to do to get their loans forgiven?
Absolutely nothing, according to a statement released by the DOE: 'The department will soon begin notifying students who attended Corinthian of this decision, with the actual discharges following in the months after. Borrowers will not have to take any actions to receive their discharges.'
This move is the latest by the Biden administration to address student loan forgiveness. In the last year, the administration has revamped the Public Service Loan Forgiveness program and erased $5.8 billion in loans for borrowers with disabilities.
Robert Bruce is a senior writer for The Penny Hoarder.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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