It comes after Corinthian, which was one of the largest for-profit post-secondary education companies in the United States, faced a string of allegations that it had intentionally deceived, defrauded, and financially exploited students.
According to the department, the group loan discharge will apply to all former students who attended any campus owned or operated by Corinthian Colleges Inc. since it was founded in 1995, up through its closure in 2015.
Those former students will have their Corinthian loans discharged without the need for any additional action on their part.
The loan discharge is the largest single such action the department has made in history and is part of the Biden-Harris administration’s “continued commitment to helping borrowers who are struggling the most by ensuring discharge programs provide borrowers the complete relief to which they are entitled,” according to the department.
Students who attended such colleges will be notified of the decision soon, the department stated. The actual discharges will follow in the months after.
Her lawsuit further alleged that Corinthian executives “knowingly misrepresented job placement rates to investors and accrediting agencies, which harmed students, investors, and taxpayers.”
That investigation and lawsuit led to several other inquiries by the Department of Education and other federal and state regulators. Corinthian ultimately sold the majority of its campuses in 2014 before closing the remaining campuses in 2015.
“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.
“For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep. 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.”
The latest action brings the total loan relief the Biden administration has approved for borrowers to $25 billion since January 2021.
In April, the Biden administration said it would discharge a total of $238 million in student loan debt for those who attended the Marinello Schools of Beauty because of its “pervasive and widespread misconduct.”
Biden promised during his 2020 presidential campaign that he would cancel $10,000 in debt for each borrower, however, some experts believe that such a program could worsen the already sky-high inflation in America.