July 7, 2022

Biden management cancels $ 5.8 billion student loan for former Corinthian students

This cancellation is a systemic discharge that has not yet been made by the Department of Education.

Some of Corinthian’s alumni are already eligible for loan waivers, but the new measure will ensure that debt relief is available to all borrowers who attended by closing in April 2015 from Corinthian’s institution in 1995.

At its peak in 2010, Corinthian colleges enrolled more than 110,000 students on 105 campuses, some of them known as Everest, Healt College or Viotech. The Department of Education has misled Corinthian colleges about their ability to convert credits to prospective students and has falsified its placement rate.

In 2013, Vice President Kamala Harris – then Attorney General of California – sued Corinthian colleges, accusing the school of fraud and misrepresentation and recruitment. The lawsuit was probably funded by Corinthians, who sold most of its premises in 2014 and closed the rest in 2015.

Political pressure to cancel student loan

Wednesday’s announcement is the latest and biggest move by the Biden administration to cancel federal student loan loans to defrauded borrowers by their nonprofit colleges. Management has made it easier for permanently disabled borrowers and public sector employees to obtain debt relief.

The new announcement brings the total student loan total approved under the Biden administration since January 2021 to $ 25 billion. President Joe Biden has also extended the epidemic-related tariff suspension several times – most recently moving the expiration date. May 1 to August 31.

But the administration’s fragmented approach to canceling student loans has failed to satisfy many Democrats who have called for Biden’s widespread cancellation of student loans of up to $ 50,000 per 43 million borrowers.

So far, Biden has resisted that pressure, but he said Some federal student loans are open to cancellation. In the course of the campaign, he proposed canceling at least $ 10,000 student loans per person in response to the epidemic, as well as forgiving borrowers of all undergraduate education related two- and four-year public colleges and universities. Earns up to $ 125,000 per year.

It is not entirely clear that the president’s executive authority allows for a wider waiver of student debt. Last year, Biden instructed attorneys in the education and justice departments to evaluate whether he has the authority to widely cancel federal student loans. Management did not release those findings.

But September 2020 Memo Harvard University’s Center for Legal Services argues that Congress has given the Department of Education the power to widely abolish federal student loans through a law called the Higher Education Act, which provides for the granting of student loans to robbers. The note states that it empowers the Secretary of Education to “create, cancel or change the debt owed under federal student loan schemes.”

Relief is available to those who have been deceived by debt

The struggle to cancel the Corinthian student loan began in 2014, when a group of students joined a group called Debt Collective. They organized the country’s first student loan strike, refusing to pay their student loan.

Former Corinthian students will now see their remaining federal student loan automatically canceled.

Students who believe they have been deceived by their college should generally call what they call repayment protection to the Department of Education.

The Biden administration has distanced itself from the backbone of these claims, which were structured during the Trump administration. It has now written off $ 7.9 billion to 690,000 borrowers.

In some cases – such as the one announced on Wednesday – the government has decided to provide relief to the entire group of students who attended a particular school at a specific time. Advocacy groups say they believe the recent Corinthian move will pave the way for groups of borrowers to be evicted in the future.

“This announcement paves the way for future group-level discharges for other nonprofit schools, including ITT Tech and the Art Institute, and for broader cancellation of all student loans,” said Thomas Coke, co-founder of Deft Collective. A statement.

This story has been updated with additional information.

CNN’s Nicki Carvajal contributed to the report.