Corinthian College Students' Federal Loans May Be Forgiven, Says Education Department
Tens of thousands of students affected by the bankruptcy of the for-profit Corinthian Colleges could benefit from massive loan-forgiveness provisions implemented by the U.S. Department of Education, the Los Angeles Times reported.
The measures, announced on Monday, might allow many students to cancel federal loan debt tied to the chain, which operated schools under the names of Heald, WyoTech and Everest College across the United States. But it is not yet clear how many students will apply and how many will be approved, the newspaper noted.
Among those eligible for loan forgiveness are students who felt they were victims of fraud because of misconduct, the department said in a statement. However, those who have already transferred or plan to transfer their credits to complete a program similar to the ones in which they were enrolled will not qualify, NBC News noted.
The federal government estimates that a grand total of about $3.6 billion in loans were handed out to Corinthian students, and former students have accused the company of having aggressively marketed its courses, charged exorbitant rates for coursework, falsified hiring statistics and urged them to take on massive debt, USA Today detailed.
On Monday, Secretary of Education Arne Duncan revealed that his department plans to develop a process to also allow non-Corinthian students to be forgiven their loans, in case they have been defrauded by similar institutions, according to the New York Times.
"You'd have to be made of stone not to feel for these students; some of these schools have brought the ethics of payday lending into higher education," the secretary said at a news conference.
Duncan noted that the Corinthian decision was merely "our first major action."
"We will make this process as easy as possible for them, including by considering claims in groups wherever possible, and hold institutions accountable," he assured.
Following Corinthian's shutdown and Chapter 11 bankruptcy-protection filing last month, the chain's 28 campuses were acquired by the nonprofit Zenith Education Group, a move that will allow most students to continue pursuing their education, officials from the Education Department told USA Today.
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