Feds offer debt relief to more former Corinthian students

AP News
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Posted: Mar 25, 2016 4:56 PM

BOSTON (AP) — The U.S. Department of Education is offering debt forgiveness to another wave of students who attended Corinthian Colleges, the now-defunct chain of for-profit schools that had campuses across the country.

After agreeing to erase the debt of more than 7,000 students in December, the department announced on Friday that students from 91 additional campuses in 20 states can now apply for debt relief. Students who attended those schools, which operated as Everest or WyoTech, can apply for relief on the department's website.

Education Secretary John B. King Jr. made the announcement on Friday in Boston, saying that college students who invest their time and energy have a right to expect high-quality degrees.

"Unfortunately, we have institutions like Corinthian that have been motivated more by profit then by the interests of students," King said.

Corinthian was one of the largest for-profit schools before it sold many of its campuses and closed others last year amid accusations of fraud. Investigators said the schools charged exorbitant fees, lied about job prospects for graduates and sometimes told students to lie about their circumstances to get more federal financial aid.

Last summer, President Barack Obama's administration announced a plan to forgive the debt of former Corinthian students.

Former officials of Corinthian could not immediately be reached for comment.

King spoke on Friday at the office Massachusetts Attorney General Maura Healey, who helped uncover evidence that two Boston-area Everest Institute campuses misrepresented their job placement rates.

"Today's announcement is completely unprecedented," Healey said. "It represents the largest group of borrowers ever made eligible in this country for loan forgiveness."

The education department added on Friday that it has now discharged loans to more than 8,800 former Corinthian students, totaling more than $130 million. That's still only a fraction of the estimated $3.6 billion in federal loans given to Corinthian students, but officials have said that all former students may not file claims.

Federal education officials said they're still working to provide relief for more students, and they're doubling down on efforts to contact borrowers who could be eligible.

In a statement on Friday, the education department also called on Congress to enact stronger rules to protect students and taxpayers from predatory colleges. It urged lawmakers to improve oversight of for-profit colleges and to ensure that the executives of fraudulent schools, not taxpayers, are held financially responsible.

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Associated Press writer Bob Salsberg contributed to this report.