Harris to announce debt relief for Corinthian College students

The Biden administration plans to forgive loans for an estimated 560,000 former students of Corinthian Colleges, a group of for-profit schools that Vice President Kamala Harris helped put out of business when she was attorney general of California, a senior administration official said Wednesday.

Harris, who won a judgment of more than $1.2-billion against the Santa Ana-based company for false advertising in 2016, plans to formally announce the loan forgiveness Thursday at the Department of Education. The department will absorb the estimated $5.8-billion cost of the federal outstanding loans. The administration said it’s the largest single loan discharge made by the department in its history. The debt forgiveness would not apply to private loans.

Former students of any of the former colleges owned by Corinthian — including Heald, Everest College, WyoTech and Everest College Phoenix — will have their loans canceled automatically. They will not need to apply.

The announcement comes as the administration deliberates whether to grant wider student loan relief affecting 43.4 million Americans who owe a combined $1.6 trillion in federal student loan debt. Those payments have been on pause since March 2020. The Corinthian students represent only a fraction of that population.

Liberal and youth activists have been pushing the administration for universal debt relief, or something close to it, with the federal government picking up the tab. Some plans have called for limiting the relief — by capping the amount of forgiveness or the income level of those who are eligible to get it.

Those who argue against universal relief say it could compound inequity by giving another leg up to higher earners with advanced degrees. The Corinthian loan forgiveness skirts those issues because students of for-profit colleges tend to be lower income and often have dimmer job prospects.

Harris, in a 2013 lawsuit, accused the company of a “predatory scheme” aimed mostly at lower-income students.

San Francisco Superior Court Judge Curtis Karnow agreed, finding in 2016 that the company misled students about job placement rates for its graduates and advertised degree programs it didn’t actually offer, among other falsehoods.

“For years, Corinthian profited off the backs of poor people,” Harris said after winning the judgment.

By then, the chain of colleges had closed and filed for bankruptcy after a slew of setbacks, including an April 2015 fine of $30 million by the Department of Education, accusing the company’s affiliated Heald College system of deploying a scheme that used temp agencies to boost its job placement statistics by hiring graduates for short-term jobs.

The college was started in 1995 and expanded as it absorbed other for-profit schools, at one point enrolling more than 110,000 students at 105 campuses.

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