Feds Forgive $103M In Debt For Nearly 7,000 Former Corinthian College Students

Nearly 7,000 additional former students of defunct for-profit chain Corinthian College will have their loan debt erased by the federal government. While the $103 million tab sounds like a lot, it’s only a fraction of the billions of dollars that Wyotech, Heald College and Everest University charged in tuition. 

The Department of Education announced Thursday that it had approved a second wave of loan forgiveness for former Corinthian students, this time focused on “borrower’s defense” claims made against the company, the Associated Press reports.

The relief covers 1,300 former students from Heald College, totaling about $28 million and 5,800 former Corinthian students who filed “closed school” claims, totaling $75 million.

Lawmakers were quick to applaud the additional relief on Thursday. Senators Dick Durbin of Illinois and Richard Blumenthal of Connecticut called the Department’s decision to erase the debt “progress for students.”

“The Department of Education’s approval of relief today is welcome news for some 1,300 former Heald students, but there are thousands more across the country who deserve the same relief,” the senators wrote in a letter. “We encourage the Department to step up the pace and scope of its Corinthian debt relief efforts to give those students the relief they deserve under the law now.”

Relief for former Corinthian students has been trickling in since the college chain collapsed – and filed for bankruptcy – in this spring.

In September, the Department said it had received 4,140 claims for borrower defense discharge since it announced in June that it would provide relief for students who attended (after June 20, 2014) the 30 CCI campuses that closed in April.

Those reviews are taking longer than one might expect as the team has to analyze state laws for each claim.

Under the law, a borrower defense to repayment provides loan forgiveness to students if their school committed fraud or broke laws.

Independent monitor for the relief process, Joseph Smith, said at the time that his team of four attorneys is reviewing claims where the “facts and law are clear,” such as those who attended Heald Colleges in California, Hawaii and Oregon.

Additionally, in February the CFPB and Dept. of Education secured $480 million in debt relief for former students.

More federal loan debt forgiven for Corinthian students [The Associated Press]

by Ashlee Kieler via Consumerist