Students who attended one of 91 schools run by Corinthian Colleges can have their debt forgiven, regulators announced today.
More than a quarter-million people are directly affected by the list of fraud findings, a Department of Education spokesman told ThinkProgress.
The schools are accused of defrauding students, mostly through advertising misleading job placement rates. The Department now believes that about 1,400 U.S. programs serving 840,000 students would not pass new accountability standards set in 2014 to be eligible to receive federal aid.
Last year, more than a dozen students who attended Corinthian-run schools said they would refuse to continue paying off their loans because they believed they had been misled about the quality of education they would receive and their career prospects. They further demanded that the government discharge their debt, citing an obscure loophole that allowed for this when a school had acted fraudulently. That loophole has since been formalized by regulators, and as of March 1 11,000 current and former students have applied to have their debt forgiven. Here's a breakdown of where they've come from according to a report released in conjunction with Friday's announcement:
Last April, the Department of Education fined Corinthian $30 million for misleading students about job placement rates at its Heald College. A short time later, the company announced it would shut down all its remaining campuses.
Friday's announcement may leave some activists unsatisfied, as the Department says that students themselves must come forward to negotiate a discharge. The Debt Collective, a group that had been organizing the student debt strikers, had been hoping the Department would announce an immediate blanket discharge.
They called today's news a "slap in the face."
"Corinthian scammed up to 500,000 people in a predatory lending scheme that was funded by US taxpayers and given the stamp of approval by the Department of Education," the group said in a statement. "As the Department has already acknowledged in its draft Defense to Repayment regulation, it has the authority to discharge debt automatically, and yet it refuses to do so. Instead the agency will require students who are living with trashed credit scores and enduring wage garnishment and harassing calls from collectors to reprove injury in order to even be considered for relief."
Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.