The White House announced on Wednesday that the Biden administration will be cancelling $5.8 billion worth of student debt for Americans who attended for-profit college.
According to the announcement, more than hundreds of thousands of students that attended the for-profit Corinthian Colleges chain will automatically have their federal student loans cancelled.
The administration movement was reportedly in response to the current controversy, involving one of the most notorious cases of fraud in American higher education.
The declaration stated that anyone who attended the chain from its founding in 1995 to its collapse in 2015 will have their student debt erased, reportedly mounting to $5.8 billion that were borrowed by more than 560,000 students, which is considered the largest single loan discharge in Education Department history.
Biden admin takes unprecedented step to cancel $6 billion in student loan debt https://t.co/JjGCf9cF72
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“As of today, every student deceived, defrauded and driven into debt by Corinthian Colleges can rest assured that the Biden-Harris Administration has their back and will discharge their federal student loans,” Education Secretary Miguel Cardona stated.
“For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep.” Cardona added.
Reports revealed that prior to this declaration, there were already tens of thousands of former Corinthian students who were eligible for debt cancellation. However, they had to navigate a confusing application process and file paperwork.
Fortunately, it will be a relief for the previous students that the current declaration will be making automatic cancellations and extended to additional borrowers.
Moreover, the US Education Department officials also declared that “those who have a remaining balance on their Corinthian debt will also get refunds on payments they have already made.”
However, the department made it clear that the action “does not apply to loans that have already been paid off in full.”
Wednesday’s news came after the administration planned to impose broader student loan forgiveness for millions of borrowers.
Meanwhile, borrowers have reportedly yet to see relief and are wondering when, and if, their loans will be forgiven.
Reports revealed that the administration has already approved $25 billion in loan forgiveness for about 1.3 million borrowers.
