The Biden administration just forgave billions in student loans
The move affects more than 560,000 people and is largest loan forgiveness effort in DOE history.
With President Biden reportedly hemming and hawing over whether or not to forgive a measly $10,000 in student loans per person — a drop in the bucket of a nearly $2 trillion debt crisis in this country — his administration is trumpeting a recent decision to discharge nearly $6 billion in loans to the hundreds of thousands of former students of the for-profit Corinthian Colleges system.
In a press release issued late Wednesday evening, the Department of Education announced it had approved the erasure of “all remaining federal student loans borrowed to attend any campus owned or operated by Corinthian Colleges Inc. (Corinthian) from its founding in 1995 through its closure in April 2015,” including for people who hadn’t even applied to have their loans forgiven yet. According to the release, this move — affecting some 560,000 borrowers to the sum of $5.8 billion dollars — is the largest single action of its kind of the Education Department’s history.
At its peak, Corinthian Colleges operated more than 100 campuses, serving approximately 74,000 students who, according to the Consumer Financial Protection Bureau, were scammed through the institution’s use of illegal predatory lending practices coupled with its false promises of job opportunities for graduates. Twenty years after it was founded, the company filed for bankruptcy protection in 2015. The following year, an investigation from Sen. Elizabeth Warren (D-Mass.) determined that more than 80,000 of the school’s former customers were “currently in some form of debt collection” stemming from their enrollment (to say nothing of the estimated 350,000 students with worthless degrees or “credits” from the school). At the time, Corinthian was also facing a number of state-level lawsuits over its business practices, including one filed by then-California Attorney General Kamala Harris, who called the “predatory scheme devised by executives at Corinthian Colleges, Inc [...] unconscionable.”
While the Education Department was quick to note that the Corinthian action brings the Biden administration’s student loan forgiveness efforts up to $25 billion to date, the White House has been resistant to ongoing calls to cancel all student loan debt held by more than 40 million borrowers in this country. Instead, the administration is reportedly focusing on $10,000 loan forgiveness per person, costing an estimated $320 billion, and fully alleviating the debts of just one-third of borrowers.