The U.S. Department of Education announced that it will settle all remaining federal student loan balances for Collins College alumni. The $5.8 billion in debt relief will affect more than 500,000 students and is the largest single debt relief bill the government has ever seen.
Former Corinthian student gets automatic loan forgiveness
Students attending campuses owned or operated by Collins College will receive their remaining government student loan refunds, ending years of speculation about alleged fraud at Collins College.
The measure would give 560,000 borrowers $5.8 billion in full federal loan forgiveness. It applies to all alumni of all corporate institutions, including alumni who have not filed a borrower defense application. Some students may also be entitled to a refund of previous payments. These student loan forgiveness will be applied automatically over the next few months.
“Starting today, any student who has been deceived, deceived and delinquent at Corinth College can rest assured that the Biden-Harris administration will stand by them and will repay their government student loans,” Education Secretary Miguel Cardona said. Released in the press. He added that the government is also increasing its accountability to for-profit institutions to ensure that similar abuses do not occur in the future.
This forgiveness comes after years of legal battles surrounding Corinthian College
Collins University closed permanently in 2015 after being denied federal funding. Even before the shutdown, the company faced criticism. Many say it leaves students deeply indebted, while distorting future job prospects and the possibility of credit transfer. The company has been the subject of multiple investigations and lawsuits, including one by then-California Attorney General Kamala Harris, one by the Department of Education, and one by the Consumer Financial Protection Bureau (CFPB).
While the CFPB lawsuit resulted in $480 million in forgiveness, not every student is eligible. In 2015, a group of alumni known as the 15 Corinthians launched a “debt strike” to forgive borrowers by protecting them until they were paid back. The loan was promised to be cancelled, but the actual relief wasn’t implemented until after Biden took office.
Before today’s announcement, about 100,000 alumni had already received student loan debt forgiveness, but this latest move by the Department of Education will pay off remaining student balances.
Biden administration wants to prevent more Collins-like cases in future
The government says the latest round of student loan forgiveness is not the end of its work. In addition to improving the delivery of existing student loan programs, the department hopes to “prevent future debt crises by blaming colleges for leaving students in debt and without good jobs.”
While Corinthian College is one of the largest cases of wrongdoing, it’s not the only one — just in the past two years, the Department of Education has made contributions from Marinello, ITT Technology, the Court Reports Institute, and others. If you have attended a school outside of Corinth and believe you have been deceived or deceived, visit the Department of Education website to apply for borrower protection.