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More Student Loan Debt Forgiven for Corinthian College Students

The government is erasing student loan debt for more than 7,000 former students of the now-defunct Corinthian Colleges- totaling over $100 million.  According to a recent report, the Education Department has approved a second wave of loan forgiveness for students who attended this college and took out loans.  This one is for students who filed “borrower’s defense” claims with the government, alleging they were lied to or mislead. At one time, Corinthian was one of the largest chains of for-profit colleges, but filed for bankruptcy protection in May 2015 after allegations of fraud surfaced.

The department’s undersecretary, Ted Mitchell said, “We will continue to provide forgiveness to every student who has been similarly mistreated.”

In a progress report released by the department, Joseph Smith, who is overseeing the debt relief, said his team has approved relief for 1,300 former Heald College students, totaling nearly $28 million in loans that now will not have to be repaid to the government.

Heald, which had campuses in California, Hawaii and Oregon, was one of three schools under the Corinthian umbrella.  The other two were Everest (with 10 Florida campuses) and WyoTech.

Another 5,800 former students from Heald, Everest and WyoTech who filed “closed-school” claims with the government will see their debt discharged, totaling $75 million. It is expected that tens of millions of dollars of additional relief will be granted in the coming months under the closed-school claims.

Education officials have predicted that if all Corinthian students who borrowed government money (dating back to 2010) would seek relief, the total cost would be $3.2 billion in student loan debt relief.

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