The U.S. Education Department (ED) announced a plan to relieve the student loan debt of students affected by the for-profit Corinthian Colleges system.
According to the Los Angeles Times, the sweeping debt relief is expected to apply to tens of thousands of students who were left with useless credits when a number of Corinthian schools abruptly closed in April. The relief will also extend to students whose schools announced their closure and were offered assistance.
In the latter's case, the student will have to have withdrawn after June 20, 2014 to qualify for debt relief.
"You'd have to be made of stone not to feel for these students," ED secretary Arne Duncan told reporters in a teleconference. "This has to be a wake-up call to Congress... Congress has to be part of the solution, not part of the problem, and candidly, members on both sides of the aisle have been part of the problem."
Corinthian Colleges initially came under federal investigation for allegations they falsified job placement statistics to attract prospective students. The system announced a full-scale closure of its campuses after the ED determined the allegations were true.
"I am committed to ensuring that every student has access to an education that will put them on solid footing for a career, and I will hold schools accountable for practices that undercut their students and taxpayers," Duncan said in a press release. "Where students have been harmed by fraudulent practices, I am fully committed to making sure students receive every penny of relief they are entitled to under law. We will make this process as easy as possible for them, including by considering claims in groups wherever possible, and hold institutions accountable."
It is not clear how much the ED will pay out, but the Times noted Corinthian enrolled 350,000 students since 2010 who then racked up about $3.5 billion in student loans.
