June 29, 2016
The U.S. Department of Education has agreed to forgive $171 million of debt owed by former students of the bankrupt for-profit school Corinthian Colleges Inc., most of them in California.
The government said Wednesday that it has granted relief to 11,173 students who attended one of the defunct Santa Ana company’s colleges, which included Heald, Everest and WyoTech.
Of the students who have filed claims, nearly 9,700 reside in California — far more than in any other state – according to a report released Wednesday by the official overseeing the claims. The average amount of relief per student was $15,280.
The number of students receiving debt relief — and the bill for taxpayers — probably will rise as government investigators continue to look at thousands of other students’ claims.
In May 2015, Corinthian filed for bankruptcy, a week after abruptly closing the doors of its remaining campuses.
The company was one of many that opened for-profit campuses across the country, often with few admissions requirements. Corinthian made it easy for students to apply for federal loans to cover its high tuition, with many accumulating debt in the tens of thousands of dollars.
But Corinthian was repeatedly found to have overstated the success of its education programs, including the numbers of students obtaining jobs that paid enough for them to pay back the debt and make a living.
For example, in March, a San Francisco County Superior Court judge found that Corinthian had provided untrue or misleading statements about graduates’ job placement rates.
The judge ordered Corinthian to pay $820 million to students — a sum that will be hard to collect. When the company filed for bankruptcy it listed $143 million in liabilities and just $19 million in assets.
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