The U.S. will forgive $5.8 billion of loans to Corinthian Colleges students
RACHEL MARTIN, HOST:
Hundreds of thousands of student loan borrowers who attended the now-defunct Corinthian Colleges are getting help from the Biden administration. The U.S. Department of Education says it will erase all of the remaining federal student loans taken out by borrowers to attend a Corinthian campus from the school's founding to its abrupt closure. The agency says it is the single-largest act of student loan forgiveness in history. We turn to NPR's Cory Turner for details.
CORY TURNER, BYLINE: During the Obama administration, the Ed Department really started going after predatory for-profit colleges, and Corinthian became kind of the poster child for this type of school. In 2015, the department found that Corinthian had engaged in widespread and pervasive misrepresentations - those are the department's words - about borrowers' future job prospects, including promises they would find a job. They falsified their public job placement rates, the department said, and they made pervasive misstatements to prospective students about the ability to transfer credits. Interestingly, Rachel, it was California's then-attorney general, Kamala Harris, who in 2013 sued Corinthian, and that kicked off a chain reaction at the state and federal level that ultimately led to Corinthian shutting down in 2015. And that's also one big reason Vice President Harris is going to be part of the official announcement of this move later today.
MARTIN: But, I mean, for years, Corinthian borrowers, Cory, have been able to ask the department to forgive their loans, right? How is this different?
TURNER: Yeah, I think this is the most interesting part, really. Under a provision, known as borrower defense, borrowers who have been defrauded by their college can apply to the Ed Department to have their loans discharged, and roughly 100,000 Corinthian borrowers have already done this. What's interesting about today's move is that it throws this application step out the window. So now the Biden administration is literally saying if you attended Corinthian between its founding in 1995 and its closing 20 years later, we will erase whatever is left of your loans automatically. The department estimates this is going to help more than half-a-million borrowers by discharging nearly $6 billion in debts, making it what the department says is the single-largest loan discharge it has ever done.
MARTIN: So can you walk us through what the Biden administration has done overall on student loan forgiveness and how this particular discharge with Corinthian Colleges fits into Biden's promises on federal student debt relief?
TURNER: Biden has already made some big changes that, you know, I've reported on this program, big fixes to the public service loan forgiveness program, also to a separate loan discharge program for borrowers with permanent disabilities. And in all, including today's news, the Biden administration has approved $25 billion in loan forgiveness for 1.3 million borrowers. It is not clear, though, Rachel, what this says, if anything, about the possibility of broader student loan forgiveness. You know, pressure has certainly been building on the White House, which has repeatedly leaked to reporters that Biden wants to forgive or plans to forgive $10,000 per borrower with some loose income limits. But I've also heard from a few sources that that decision has not yet been made.
MARTIN: OK. NPR's education correspondent Cory Turner. Cory, thank you.
TURNER: You're welcome, Rachel. Transcript provided by NPR, Copyright NPR.