Seven years after for-profit Corinthian Colleges closes, Biden forgives $5.8B in student debt

The Education Department has announced it will forgive $5.8 billion in federal loans for students who attended any for-profit Corinthian Colleges. Roughly 560,000 borrowers, including those who did no apply for debt relief, will automatically be notified and receive compensation in upcoming months.

Corinthian Colleges closed all its campuses in 2015 after the department found that they were misleading their students. With 110,000 students at 105 campuses in 2010, it was one of the largest for-profit education providers in the U.S. 

"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," Education Secretary Miguel Cardona said. "While our actions today will relieve Corinthian Colleges' victims of their burdens."

Vice President Kamala Harris, as California attorney general, sued Corinthian in 2013.

"Corinthian purposely and fraudulently went after the folks most in need, by their own definition," Harris said Tuesday at the White House. "The company believed they could get away with it because, as predators are [wont] to do, they targeted people who they assumed wouldn't fight back. They targeted people who they assumed no one would be there to fight for. And they were wrong."

She continued her case through 2016, when California obtained a $1.1 billion state court judgment against Corinthian. Harris found that Corinthian was misrepresenting "job placement rates" and the ability to "transfer credits over the same period" at campuses like Everest. 

As part of the debt-forgiveness plan, the Education Department will continue to push for measures that better the "implementation of the student loan programs" to avoid a future debt crisis. 

"These goals also include enacting lasting policies to make loans more affordable and prevent a future debt crisis by holding colleges accountable for leaving students with mountains of debt and without good jobs," the department said. 

The department has now approved $25 billion in loan forgiveness for 1.3 million borrowers.