Government to forgive debt of Corinthian Colleges students

by Jessie Hellmann - 03/25/16 12:21 PM ET

Former students of for-profit Corinthian Colleges could receive billions in debt forgiveness from the federal government, the U.S. Department of Education announced Friday.

The department said students who were defrauded at 91 former Corinthian Colleges campuses across 20 states from 2010 to 2014 will have a “clear path” to loan forgiveness if they apply for it.

{mosads}The agency has made findings of fraud against more than 100 of Corinthian’s former campuses.

“When Americans invest their time, money and effort to gain new skills, they have a right to expect they’ll get an education that leads to a better life for them and their families. Corinthian was more worried about profits than about students’ lives,” said Joseph Smith of the Department of Education in a news release.

Corinthian Colleges filed for bankruptcy and closed campuses earlier this year after the Consumer Financial Protection Bureau and state attorneys general from 20 states sued the school for making false and misleading advertisements to entice students to enroll and take out loans to cover the costs.

The department has already approved loan discharges for more than 8,800 former Corinthian students nationwide, totaling more than $130 million.

In June of last year, the department said the total cost to taxpayers could be up to $3.5 billion if all 350,000 of the former students apply, according to BuzzFeed News.

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