WASHINGTON, D.C. – The Biden administration recently announced it would cancel all outstanding federal student loans held by 560,000 former Corinthian Colleges students.
Center for Responsible Lending Senior Policy Counsel Whitney Barkley-Denney made the following statement:
We applaud President Biden and Vice President Harris for this move. Tens of thousands of former Corinthian students who had been defrauded by their school, and left wondering for years how they’d recover the money they lost, are now at ease. The administration now needs to immediately cancel $50,000 of student loan debt per borrower and abandon its piecemeal approach to cancellation.
While historic, the relief provided to Corinthian students represents only a tiny fraction of students who need cancellation. Millions of low-income borrowers and borrowers of color continue to carry the burden of an unforgiving student loan crisis.
Background
Corinthian Colleges was one of the largest for-profit higher education companies in the United States. It announced it would close its doors in 2015, years after defrauding its students, most of whom were women, Black, Latino and low-income.
In September 2014, the Consumer Financial Protection Bureau (CFPB) sued Corinthian Colleges, Inc. for luring students into taking out private loans to cover expensive tuition costs and using abusive debt collection techniques, such as pulling students out of class, denying access to academic resources and withholding diplomas. In late 2015, a federal court ruled in favor of the CFPB and ordered Corinthian to pay $530 million in restitution to former students.
Corinthian Colleges faced numerous lawsuits throughout the years, including a lawsuit in 2013 by Vice President Kamala Harris, who was the attorney general in California at the time, for intentionally misleading students and engaging them in deceptive and false advertising and recruitment.
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Press Contact: Vincenza Previte vincenza.previte@responsiblelending.org