In its largest student loan forgiveness action ever, the Education Department said on Wednesday that it would wipe out $5.8 billion owed by 560,000 borrowers who attended Corinthian Colleges, one of the nation's biggest for-profit college chains before it collapsed in 2015.
The debt cancellation will be automatic, meaning that former Corinthian students won't have to apply to have their debts canceled. The remaining balance on federal student loans will be eliminated for those who attended any of the Corinthian campuses.
The Education Secretary said that Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep.
Student borrowers and progressive lawmakers want President Biden to take executive action to cancel federal student loan debts. Mr. Biden said in April that he was considering dealing with some debt reduction, but the White House did not respond.
His administration has greatly expanded the use of relief programs for a variety of borrowers, including public service workers, people who are permanently disabled and people who were cheated by colleges.
The Corinthian decision was celebrated by borrowers and their advocates.
Thomas Gokey is a founder of the Debt Collective, an activist group.
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