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The
decision, which Vice President Kamala Harris will discuss
publicly on Thursday, will result in $5.8 billion in loan
forgiveness for 560,000 borrowers, the largest single such move
ever made by the department, department officials said.
The department was investigating problems at other institutions,
and this could lead to loan discharges for more students cheated
by their colleges, a senior official told reporters.
"The reality is that far too many students have been left worse
off than if they had never gone to college at all," a second
official said, citing "troubling racial disparities."
Harris sued Corinthian when she was California attorney general,
alleging the Santa Ana, California-based company intentionally
misled students about job placement rates and engaged in
deceptive advertising and recruitment.
Corinthian, which operated the Heald College, Everest and
WyoTech schools and offered degrees in healthcare and trades,
filed for bankruptcy in May 2015, 20 years after its founding.
At its peak in 2010, Corinthian enrolled more than 110,000
students at 105 campuses.
The department's move will cancel outstanding loans. Borrowers
who have not paid off their debt will receive refunds of past
loan payments, officials said. But borrowers who fully paid off
their loans will not receive refunds, they said.
Borrowers would not have to take any action to receive the
money, they added.
Officials said they continued to study broader student debt
relief options. To date, the department has approved $25 billion
in loan relief for 1.3 million borrowers since January 2021 for
a variety of reasons.
(Reporting by Andrea Shalal, Editing by Rosalba O'Brien and
Cynthia Osterman)
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