While campaigning, President Joe Biden had promised to address the matter of student loan debt if elected, and he has since expressed interest in canceling $10,000 per borrower. The White House has suggested there would be some kind of income criteria that would prevent high earners from benefiting.
But for now, the Biden administration is taking a big step to address a fraud scandal at Corinthian Colleges, a for-profit chain that collapsed nearly a decade ago: anyone who enrolled in the company’s schools will have his or her federal student debt erased, clearing away $5.8 billion for more than 560,000 borrowers in the largest single loan forgiveness ever, according to the Education Department.Now other recent college grads await a similar decision for their own student debts.
WATCH LIVE: Harris remarks on cancelled student loan debt for former Corinthian College students https://t.co/ecvjqlpvsn
— PBS NewsHour (@NewsHour) June 2, 2022
During its peak, Corinthian was one of the largest for-profit college companies, with more than 100 campuses and more than 110,000 students at its Everest, WyoTech, and Heald schools. As California’s Attorney General, Kamala Harris sued Corinthian Colleges. On Thursday, Vice President Harris called the Corinthian case “a milestone” in “a journey for justice for everyone who was defrauded” and will “put real money in the pockets of real people.” She made a brief reference to the remaining questions about the next steps on other student loan debt. “As a nation, we have a lot more work to do on these issues,” she said.
— Lynx 💛 (@LustrousLynx) June 2, 2022
The Trump administration drew criticism when it started granting only partial loan cancellation to defrauded students, giving lower levels of relief to those with higher incomes. Former Corinthian students sued, and a federal judge halted the policy and ordered the Education Department to stop collecting payments on Corinthian debt. The Biden administration later announced full cancellation for all Corinthian students who had been given only partial forgiveness, but thousands of others were left waiting for the Education Department to process their relief applications.
Vice President Kamala Harris officially announces the Department of Education’s $5.8 billion plan to cancel all federal student loan debt for those who attended the defunct for-profit chain Corinthian Colleges. pic.twitter.com/O0pWQ40FoP
— The Recount (@therecount) June 2, 2022
As of December, the Education Department reported it had more than 109,000 pending applications from students alleging fraud by their colleges, mostly in the for-profit industry.