Corinthian Colleges federal student loan debt canceled
26K Illinois borrowers will have more than $226M in debt cleared
WASHINGTON — The Education Department on Wednesday announced it will cancel all federal student loans borrowed to attend any campus owned or operated by the now defunct Corinthian Colleges, a for-profit school which operated in Illinois — and the subject of multiple investigations for exploiting students.
The debt discharge covers remaining federal loans from the founding of the school in 1995 through its April 2015 closure.
Nationally, 560,000 borrowers will have loans of $5.8 billion discharged.
An Education Department spokesperson told the Chicago Sun-Times that in Illinois, about 26,000 borrowers will have over $226 million in student loan debt canceled.
Sen. Dick Durbin, D-Ill., has been leading crusades for years against for-profit schools. In 2015, Durbin said Corinthian students “were enticed to enroll in — and to incur massive debt for — failing school programs.”
In April, Durbin — for the ninth consecutive year — warned students against attending for-profit colleges, saying in a statement:
“In the last several years, several major for-profit college companies have collapsed under the weight of their own wrongdoing, including Corinthian College, Inc. (operated Everest Colleges), ITT Tech, Education Corporation of America, Vatterott, and Dream Center’s Argosy University and Illinois Institute of Art. These companies engaged in a variety of fraudulent and predatory practices. When they closed abruptly, hundreds of thousands of students across the country — including thousands in Illinois — were left with student loans and no degree. These closures put students at risk of having their education disrupted, losing credits when starting at a new school, and taking on more debt to finish their studies.”
The Education Department, in a statement announcing the Corinthian debt discharge, noted that Corinthian “engaged in widespread and pervasive misrepresentations related to a borrower’s employment prospects, including guarantees they would find a job. Corinthian also made pervasive misstatements to prospective students about the ability to transfer credits and falsified their public job placement rates. Founded in 1995, Corinthian acquired several troubled private for-profit colleges across the country. At its peak in 2010, it enrolled more than 110,000 students at 105 campuses.”
In 2013, when Vice President Kamala Harris was attorney general of California, she sued Corinthian, alleging that “the company intentionally misrepresented to its students about job placement rates and was engaging in deceptive and false advertising and recruitment.”