Nearly $28 million in federal student loans owed by 1,312 former Corinthian Colleges students will be officially canceled by the U.S. Department of Education, according to a government report released this week. The report determined that students had been "swindled" into taking out loans by false job placement rates used in Corinthian’s advertising, the Huffington Post reports. Impacted students are expected to begin receiving correspondence regarding the status of their debts as early as Friday.
The Obama administration's move apparently marks the first time a provision in federal law allowing student debtors the right to petition the Education Department to discharge debts stemming from fraudulent practices has been used, though progress surrounding the adoption of other debt relief programs aimed at easing the student debt crisis remains frustratingly slow. "The department funneled billions of dollars to executives and shareholders of these fraudulent 'schools' for over a decade," the Debt Collective, an activist group, in a statement to the Huffington Post. "It now wants to save face by creating a Rube Goldberg-type contraption to prevent as many people as possible from seeking the relief they deserve."
California’s top prosecutor claims he discovered Corinthian marketing documents that said the company aimed directly at "isolated, impatient people with low self-esteem and few people in their lives who care about them." According to the Washington Post, the for-profit chain specifically targeted veterans, single mothers, and "low-income people" by offering empty promises of eventual employment. In the biggest failure of a college chain in the history of this country, Corinthian officially filed for bankruptcy in May of this year.
