‘A Milestone’: Biden Administration Wipes Out $5.8 Billion Of Student Loan Debt From Corinthian Colleges

REUTERS/Kevin Lamarque

Shelby Talcott Senior White House Correspondent
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Vice President Kamala Harris formally announced Thursday the administration’s decision to cancel federal student loan debt for Corinthian Colleges.

Harris, speaking at the Department of Education in Washington, D.C., highlighted that the announcement is “a milestone.” She noted that she became involved in the issue “nearly a decade ago” when she sued Corinthian in 2013 while serving as the attorney general in California.

“We won because our investigation discovered that Corinthian had engaged in false and deceptive advertising,” Harris said. “They promoted programs that they did not offer. They penalized their telemarketers if the telemarketers revealed the truth to prospective students.”

“In 2016, after we obtained the judgment against Corinthian, I said then that the least we could do was to give everyone Corinthian took advantage of the relief they deserve,” she continued. “I said then that we would do everything in our power to help them. Finally – and sadly it has taken this long – finally, that promise is fulfilled.”

FILE PHOTO: White House economic adviser Brian Deese speaks during a press briefing at the White House in Washington, U.S., March 31, 2022. REUTERS/Kevin Lamarque

FILE PHOTO: White House economic adviser Brian Deese speaks during a press briefing at the White House in Washington, U.S., March 31, 2022. REUTERS/Kevin Lamarque

The Department of Education found in 2015 that Corinthian, a for-profit education company, “engaged in widespread and pervasive misrepresentations” about potential job opportunities that students would get if they attended the school, NPR previously reported.

The announcement is billed as the the single largest discharge of loan forgiveness in history, as it allows for $5.8 billion of loan forgiveness. This will impact 560,000 borrowers who went to Corinthian Colleges.

“It means that if you attended Corinthian at any point in its existence, you will receive this relief automatically,” Harris said Thursday. “You do not need to apply for it. All former students will soon receive notice that Corinthian College federal loans will be cancelled. And this will benefit more than half a million people who still have loans. And it will add up to almost $6 billion in debt relief for former students.”

“Thank you for all of you who helped us deliver justice,” Harris added.

The decision from the White House coincides with a larger debate about student loan cancellation. President Joe Biden hasn’t yet officially decided on how to move forward with student loan cancellation, though recent reports indicated that he may cancel $10,000 for each borrower, depending on the individual’s salary. (RELATED: Biden Considering $10,000 Student Loan Forgiveness Per Borrower)

“No decisions have been made yet. But as a reminder, no one has been required to pay a single dime of student loans since the president took office,” White House spokesman Vedant Patel told Reuters of the reporting.

The announcement also coincides with inflation woes. White House National Economic Council director Brian Deese argued Tuesday that cancelling some student loan debts wouldn’t affect inflation in a meaningful way, Reuters reported.