$5.8 billion in debt held by 560K former Corinthian College students to be forgiven

The Department of Education will discharge the debt of 560,000 borrowers who took out loans to attend now-defunct Corinthian Colleges, a total of $5.8 billion in full loan discharges.

Vice President Kamala Harris started the investigation against Corinthian Colleges and its subsidiaries nearly a decade ago as California's attorney general, finding they had engaged in false and deceptive advertising, promoted programs that were not actually offered, and penalized telemarketers if the truth were revealed to prospective students.

"Their ads falsely promised students that if they attended certain programs, they would be guaranteed a job after graduation, raising the hopes of people who worked so hard for the bit of money they had to get in these programs," Harris said. "Our investigation revealed that some of the degrees from Corinthian were so worthless that they didn't help a single student get a job."

Nearly 35,000 Corinthian College students in California had already had their student loan debt forgiven in 2018 in a deal with Balboa Student Loan Trust. The discharge announced by the Department of Education forgives loans for borrowers even if they had not applied for loan forgiveness, providing nearly 93,000 more Californians with an estimated $960 million in federal student loan debt relief.

The loan relief is expected to be "life changing" for tens of thousands of borrowers who, California Attorney General Rob Bonta said. 

"For these borrowers, whose only mistake was trusting Corinthian Colleges with their higher education dreams, debt relief has been hard fought and long overdue," Bonta said in a statement.

The Biden-Harris Administration had just forgiven $238 million worth of loans held by students who attended Marinello beauty schools in April. Discharging the debt of all Corinthian loan holders is the single largest loan discharge the Department of Education has made in history, totaling $25 billion in loan relief to borrowers since January of 2021.

Corinthian Colleges was founded in 1995, and at its peak in 2010, enrolled more than 110,000 students throughout the California at 105 Everest, Heald, and WyoTech campuses. The Santa Ana-based for-profit college, which shut down in 2015 amid a cash shortage and fraud allegations, operated Everest and WyoTech colleges throughout California. 

Former students will be notified by the Department of Education of the discharge and will not have to take any action to receive the loan forgiveness.