Hundreds of thousands of students who attended the for-profit Corinthian Colleges chain will automatically get their federal student loans canceled, the Biden administration says.
The Associated Press reports that people who attended the now-defunct chain from its founding in 1995 to its collapse in 2015 will get their federal student debt wiped clean. The move will erase $5.8 billion in debt for more than 560,000 borrowers.
Tens of thousands of former Corinthian students already were eligible for debt cancellation, but they had to file paperwork and navigate an application process that advocates say is confusing. Now, the relief will be made automatic and extended to additional borrowers.
Those with a remaining balance on their Corinthian debt will also get refunds on payments already made. But the action does not apply to loans paid in full.
At its peak, Corinthian was one of the largest for-profit college companies. It had more than 100 campuses and more than 110,000 students at its Everest, WyoTech and Heald schools.
The company shut down in 2015 amid widespread findings of fraud.
The Obama administration found that scores of campuses were falsifying data on the success of their graduates. In some cases, the schools reported that students had found jobs in their fields of study even though they were working at grocery stores or fast food chains.
Students commonly told investigators they were pressured to enroll with promises of lucrative employment, only to end up with huge sums of debt and few job prospects. Federal officials found that the company falsely told students their course credits could be transferred to other colleges.