Biden Admin Cancels Student Loans Of 560,000 Borrowers From These Schools

The United States government will cancel the student loans of more than half a million students, forgiving nearly $6 billion worth of debt, the Department of Education (ED) announced Wednesday.

The ED approved to discharge all remaining federal loans borrowed to attend any campus owned or operated by Corinthian Colleges from its founding in 1995 to its closure in April 2015, the government agency said in a statement.

This decision, which will result in 560,000 borrowers receiving $5.8 billion in full loan discharges, is "the largest single loan discharge the Department has made in history," the statement read.

The administration of President Joe Biden and Vice President Kamala Harris has approved $25 billion worth of loan relief since January of last year.

Before its bankruptcy in 2015, Corinthian Colleges was one of the largest for-profit post-secondary education companies in the United States, CNBC reported.

The company, which had a peak of 110,000 enrollees across 105 campuses in 2010, operated campuses for Everest College, Heald College and WyoTech, among many others.

However, Corinthian Colleges' campuses were accused of predatory and unlawful practices, and the company faced lawsuits from the Consumer Financial Protection Bureau and Vice President Harris when she was the attorney general of California.

"As of 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.

"While our actions today will relieve Corinthian Colleges' victims of their burdens, the Department of Education is actively ramping up oversight to better protect today's students from tactics and make sure that for-profit institutions – and the corporations that own them — never again get away with such abuse," he added.

Among the beneficiaries of the ED's debt erasure are loaners who have not yet applied for a borrower defense discharge, according to the department. They should have their debts discharged without any additional action on their part.

Former Corinthian Colleges students who still have a student loan balance should be refunded for previous statements made on their debt, senior administration officials said.

The relief should be automatic, which means borrowers will not have to navigate any paperwork or apply, the officials added. Qualifying borrowers are expected to be notified within weeks.

"Many borrowers have been waiting for years and years for their applications to be processed. They’ll no longer be waiting in limbo," said Mark Kantrowitz, a higher education expert.