More than half a million people are celebrating after the Biden Administration announced plans to cancel $5.8 billion in student loan debt for those who attended the now shuttered network of higher education institutions known as Corinthian Colleges, according to CNN.
The decision marks the biggest one-time payment ever made by the Department of Education and will apply to former students enrolled at any Corinthian-owned school between the company’s 1995 founding and April 2015 when its doors closed. Qualifying borrowers who made previous loan payments will also be refunded, according to CNBC.
“It’s really hard to overstate how transformative this is going to be for hundreds of thousands of people,” said Thomas Gokey, a founder of the organization Debt Collective.
In its heyday, Corinthian was among the country’s largest for-profit college companies with more than 100 campuses nationwide, but the network was eventually exposed for false recruiting practices and deceptive graduate job placement records, among other charges.
“For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep,” Education Secretary Miguel Cardona told The New York Times.
Investigations were launched on both the state and federal level, including a successful lawsuit that Vice President Kamala Harris filed against Corinthian in her former role as California attorney general. The company was ultimately forced to offload its campuses as it went bankrupt in 2014.
The Biden administration has approved over $2o billion in student debt cancellation since January 2021, and most recently extended the loan moratorium originally established due to the pandemic from May 1 to August 31. However, President Biden remains under pressure to erase debt for students nationwide instead of continuing to postpone the date when loan payments are set to resume.