Biden Administration cancels nearly $6 billion in loans for more than 560,000 students
Following a series of misdeeds exposed by the Consumer Financial Protection Bureau (CFPB) and state attorneys general that ultimately led to the closure of for-profit schools owned by Corinthian Colleges, the U.S. Department of Education announced it is cancelling $5.8 billion in student loans owed by students who attended the schools. More than 560,000 students will receive relief as a result of the action.
In a blog post on the cancellation, CFPB Director Rohit Chopra said:
"This loan cancellation would not have been possible without the tenacity of so many individual student loan borrowers harmed by Corinthian’s tactics. Many of them came forward to law enforcement agencies and regulators to detail systemic abuses. Others even had the courage to make their stories public to urge government authorities to act, rather than sitting on the sidelines. Over the last decade, I had the opportunity to speak with many of them to learn about Corinthian’s conduct."
Corinthian had been a repeat offender when it came to false claims and defrauding students.
The Consumer Financial Protection Bureau and state attorneys general actively pursued Corinthian for its misconduct. The CFPB filed a lawsuit in 2014, obtained a default judgment and secured $480 million in private student loan cancellation in 2015, and won another $183 million in loan cancellation in 2017. In 2016, then-California Attorney General Kamala Harris won a $1.1 billion judgment against Corinthian. Many other state attorneys general across the country also took actions to hold the company accountable for its wrongdoing.
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