The Ministry of Education took on Wednesday the largest student loan forgiveness action to date, with 560,000 borrowers attending Corinthian College, one of the country’s largest for-profit college chains, before it collapsed in 2015. Announced that it will wipe out the $ 5.8 billion.
Debt cancellation is automatic. This means that ex-Corinthian students do not have to apply for debt cancellation. The Ministry of Education will eliminate the remaining balance of federal student loans for those who participated in the Corinth campus or online program during the 20-year life of the chain.
“For too long, Corinthian engaged in large-scale economic exploitation of students and misleaded them into taking on more and more debt to pay promises they never kept,” Secretary of Education Miguel said.・ Cardona said.
President Biden faces strong pressure from student borrowers and progressive lawmakers to take administrative steps to significantly cancel the federal student loan debt. During the campaign, Mr. Biden said, “Everyone in this generation“I said in April.Considering dealing with some debt reductionsHowever, White House officials said the final decision had not yet been made.
As a tentative step, his administration Significantly expand the use of government relief programs Targets a variety of borrowers, including Civil servantPeople with permanent disabilities or those who have been fooled by the university.
Borrowers and their supporters celebrated Corinth’s decision as a watershed moment.
Thomas Gokey, founder of the activist group Debt Collective, said:
Corinthian has become one of the most prominent examples of bad behavior in the often troubled for-profit college industry. Founded in 1995, the company acquired a series of schools across the country, enrolling 110,000 students on more than 100 campuses at peak times.
However, allegations of illegal recruitment tactics, crude educational programs, and false promises about student career prospects and potential future income. Overshadowed the company for years, Leads to a series of investigations and proceedings by state and federal agencies.When Vice President Kamala Harris was the Attorney General of California, she Sued the chain in 2013 What she called “designed to make a profit” and “unconscientious” plans by targeting vulnerable people such as low-income workers, single parents, and military veterans.
The registration plummeted, so Corinthian Closed campus and filed for bankruptcy, Grounded tens of thousands of students who were pursuing a degree and certificate. The meltdown caused a grassroots repulsion.A group of students who called themselves Corinthians 15 Started debt strike and refused to pay federal student loan..
They also revealed ambiguous provisions in the law governing loans. If the borrower is significantly misunderstood by the school, they can ask the government to allow the loan. Just as banks assess homes before issuing mortgages, the Ministry of Education is supposed to ensure that programs that allow taxpayer-backed loans to be paid are legal.
Backed by debt groups, Corinthian 15 has hundreds of students Flooding departments with loan relief applications Through a program that has become known as “debtor defense against repayments.” Tens of thousands of former Corinthian students eventually joined the action. In 2015, Arne Duncan, then education secretary, The government has announced that it will wipe out their loans..
However, the process was prolonged and a relatively small number of debts had been repaid by the time President Barack Obama resigned. Betsy DeVos, who took over the education secretary under President Donald J. Trump, Attempted to freeze the program and significantly reduce relief It will be provided to successful applicants.
Mr Biden reversed those moves, and about 100,000 former Corinthian students had already fully forgiven their loans. Wednesday’s actions will extend relief to hundreds of thousands of people who have not filed a borrower’s defense application. Also, those who made unpaid payments on federal-owned loans will receive refunds for past payments, Ministry of Education officials said Wednesday.
“This is the first time in a while,” said Nathan Horns, a member of Corinthian 15 who attended Everest College in Ontario, California.
Another participant on the first strike, Latonya Suggs, said he had mixed feelings about the victory. “It took too long,” she said. “I had a hard time dealing with this for years.”
Tens of thousands of borrowers from dozens of different schools are still waiting for a decision on their defense claims. Some of them were submitted 6 years ago.Approximately 200,000 applicants, including 130,000 rejected in the final year of the Trump administration Class action proceedings Seeking relief.
“We celebrate today and return to work tomorrow,” said Irene Connor, director of the predatory student lending project on behalf of those borrowers in court.
Suggs is also looking to the future and will continue her work to forgive large students for debt. “We weren’t just fighting for the Corinthians. We’re fighting for everyone,” she said. “There is one victory, and there are many more.”