Biden Cancels $5.8 Billion in Student Loans for Former Corinthian College Students
The Biden administration is canceling another $5.8 billion in student debt for 560,000 students who were defrauded by Corinthian Colleges, a for-profit chain that went under in 2015. The debt relief will be automatic and apply to every student who got federal loans to attend Corinthian. Many will get refunds for past payments.
“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,” Education Secretary Miguel Cardona said Wednesday. Vice President Kamala Harris, who as attorney general of California won a $1.2 billion judgment against the education chain, will be formally announcing the move.
When she filed suit, in 2013, Harris said, “The predatory scheme devised by executives at Corinthian Colleges, Inc. is unconscionable. Designed to rake in profits and mislead investors, they targeted some of our state’s most particularly vulnerable people—including low income, single mothers, and veterans returning from combat.” The findings in that suit included that Corinthian misled prospective students about job placement rates.
Under President Barack Obama, the Education Department announced debt relief for those defrauded by Corinthian, but Donald Trump and his education secretary, Betsy DeVos, put the brakes on that effort. Now President Joe Biden will make it real.
But this was not simply relief handed down from on high. At The American Prospect, David Dayen reports on the seven-year debt strike that not only laid the groundwork for this specific move but for a lot of student debt activism, building the momentum for a cancellation movement. Corinthian debt strikers flooded the Education Department with “borrower defense to repayment” claims entitling them to debt discharge because they had been defrauded. That set in motion the chain of events at the federal level that is now culminating in $5.8 billion of debt being discharged for 560,000 people, while Biden considers $10,000 in relief for many student debtors.
The Biden administration has also revamped the Public Service Loan Forgiveness program, introduced fixes to income-driven repayment, and extended relief to people with disabilities.
”I feel a huge emotional relief that this journey that we had people go on had such enormous success,” Astra Taylor, a cofounder of the Debt Collective, told Dayen. “Not just financial relief, but it did set the stage for broader debt cancellation.” The fight isn’t over, but this is a victory.
Biden administration cancels $5.8 billion in student debt for people who attended for-profit college
https://www.cbsnews.com/news/student-loan-debt-cancellation-6-billion-corinthian-colleges
