Today, the U.S. Department of Education the cancellation of $5.8 billion in federal student loans for 560,000 individuals who borrowed to attend schools owned by Corinthian Colleges, the for-profit college conglomerate that is now defunct.
Corinthian was a notorious repeat offender that defrauded its students and the public over many years.
This loan cancellation would not have been possible without the tenacity of so many individual student loan borrowers harmed by Corinthian’s tactics. Many of them came forward to law enforcement agencies and regulators to detail systemic abuses. Others even had the courage to make their stories public to urge government authorities to act, rather than sitting on the sidelines. Over the last decade, I had the opportunity to speak with many of them to learn about Corinthian’s conduct.
The Consumer Financial Protection Bureau and state attorneys general actively pursued Corinthian for its misconduct. The CFPB filed a lawsuit in 2014, obtained a default judgment and secured $480 million in private student loan cancellation in 2015, and won another $183 million in loan cancellation in 2017. In 2016, then-California Attorney General Kamala Harris won a $1.1 billion against Corinthian. Many other state attorneys general across the country also took actions to hold the company accountable for its wrongdoing.
The decision to automatically cancel these loans will be a lifeline to so many Americans whose financial lives were ruined by Corinthian Colleges. While they will never get back the time they lost, they will receive the relief under the law that they have long been owed.