The US government is about to provide unprecedented debt relief to a huge pool of students
In a press conference, Secretary of Education Arne Duncan also said the department is going to create a plan that will forgive the debt of any student defrauded by their college, The New York Times' Tamar Lewin notes.
Lewin noted that "the government has never before opened debt relief to such a potentially large pool of students."
In a statement sent to Business Insider, the Education Department estimated that the cost of forgiving debt of students who attended one of Corinthian's colleges would be $544 million.
The plan announced Monday will let students who left the schools run by Corinthian on or after June 20 last year receive a closed-school discharge of their federal student loans. This is instead of the usual period of 120 days up until it closed its last campuses on April 26, effectively adding about six months to the eligibility period.
Santa Ana, California-based Corinthian, which had operated the Heald College, Everest and WyoTech schools and offered degrees in healthcare and trades, filed for bankruptcy on May 4. It entered Chapter 11 with $143 million in debt and about $19 million in assets, according to Delaware bankruptcy court documents.
Late last year, Corinthian sold off more than half its campuses to nonprofit education provider ECMC Group Inc. Thirteen campuses, included Everest and WyoTech in California, remained open up to the April 26 announcement.
In April, the Department of Education fined Corinthian $30 million for misrepresenting job placement rates to students in its Heald College system, and said that Heald would no longer be allowed to enroll students.
Founded in 1995, Corinthian was one of the largest US for-profit college operators, at one point employing more than 10,000 people, and running more than 100 campuses with 74,000 total students, court papers show.
For-profit education companies such as Corinthian, Apollo Education Group Inc and Strayer Education Inc, have struggled to attract students since a 2010 government crackdown revealed high student debt loads, low graduation rates and poor employability of graduates.
(Reuters reporting by Eric Walsh; Additional Reuters reporting by Nick Brown in New York and Tom Heals in Wilmington, Delaware; Editing by Eric Beech)
- US buys 81 Soviet-era combat aircraft from Russia's ally costing on average less than $20,000 each, report says
- 2 states where home prices are falling because there are too many houses and not enough buyers
- A couple accidentally shipped their cat in an Amazon return package. It arrived safely 6 days later, hundreds of miles away.
- Why did a NASA spacecraft suddenly start talking gibberish after more than 45 years of operation? What fixed it?
- ICICI Bank shares climb nearly 5% after Q4 earnings; mcap soars by ₹36,555.4 crore
- Markets rebound sharply on buying in bank stocks firm global trends
- Bengaluru's rental income highest in Q1-2024, Mumbai next: Anarock report
- Rupee falls 10 paise to settle at 83.48 against US dollar
- Nothing Phone (2a) blue edition launched
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market