Al Seib / Los Angeles Times via Getty
The U.S. Department of Education will forgive all outstanding loans for students who attended Corinthian Colleges, which was one of the country's largest for-profit education companies before it suddenly closed in 2015.
On Wednesday, the Department of Education announced it plans to cancel nearly $5.8 billion in remaining loans for 560,000 borrowers who enrolled in Corinthian programs before the college chain's collapse.
The loan forgiveness is the largest amount of debt the federal government has erased in one action, according to the Department of Education's press release.
"As of today, every student deceived, defrauded, and driven into debt by Corinthian Colleges can rest assured that the Biden-Harris administration has their back and will discharge their federal student loans," said U.S. Secretary of Education Miguel Cardona in a statement.
"For far too long, 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," he continued. "While our actions today will relieve Corinthian Colleges' victims of their burdens, the Department of Education is actively ramping up oversight to better protect today's students from tactics and make sure that for-profit institutions — and the corporations that own them — never again get away with such abuse."
On Thursday, Vice President Kamala Harris spoke out about the loan forgiveness action for Corinthian students.
"Today, we are here to mark a milestone. It is a milestone in a journey so many of us have been traveling for quite some time — a journey for justice for everyone who was defrauded by Corinthian Colleges," she said.
She continued, "Students who simply wanted to better their prospects in life and instead found themselves taken advantage of by a scam that took their money and gave them nothing in return except heartache."
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In 2016, Harris, who was then the attorney general of California, announced that her office had obtained a $1.1 billion judgment against the defunct college chain. She sued the company in 2013 to "put an end to abusive practices that left tens of thousands of students under a mountain of debt and useless degrees."
The Department of Education's 2015 investigation of Corinthian Colleges found the company "engaged in widespread and pervasive misrepresentations related to a borrower's employment prospects, including guarantees they would find a job," according to the press release.
Corinthian Colleges filed for bankruptcy in May 2015 after the Education Department cut off its ability to obtain federal money, according to USA Today.