The government is wiping the slate clean for indebted students who attended one of Corinthian’s 100 campuses, CNN Money reports.
Corinthian, a for-profit education company perhaps best known for the Everest institutions, is facing scrutiny from federal regulators for years of allegedly engaging in predatory lending schemes.
As MadameNoire wrote last year, the Corinthian network is accused of “targeting low-income students and falsely inflating job placement numbers.” Regulators claim that Corinthian encouraged students to take out high-interest loans and then used “abusive tactics” to obtain repayment.
According to a report by Diverse: Issues in Higher Education, just 13 percent of college attendees are from for-profit colleges, but they account for nearly a half of all loan defaults.
The school network was fined $30 million fine for providing misleading information to students; the company shuttered its remaining campuses and filed for Chapter 11 protection last month. The company is $143 million in debt. After 20 years, Corinthian Colleges is history.
While Corinthian Colleges is taking its last breath, students from the shoddy for-profit network will get a new beginning. The U.S. government announced on Monday that it will forgive loans from students who attended the closed schools.
“I am fully committed to making sure students receive every penny of relief they are entitled to under law,” said U.S. Secretary of Education Arne Duncan in a statement. “We will make this process as easy as possible for them, including by considering claims in groups wherever possible, and hold institutions accountable.”
For the past five years, 350,000 took out loans to attend a Corinthian college, a total of approximately $3.5 billion in federal loans.
“Helping those eligible students who have been harmed is the right thing to do,” said a statement from Representative John Kline, the Minnesota Republican who is head of the Education and Workforce Committee, The New York Times wrote.