The U.S. Department of Education announced Wednesday that it will cancel the federal student loans of hundreds of thousands of people.
Those people borrowed money to attend Corinthian Colleges, a for-profit group of schools that was judged to have carried out fraud.
Secretary of Education Miguel Cardona announced the move to cancel or “discharge” the loans. His message was for students who went to schools run by Corinthian Colleges between 1995 and 2015 and who still owe money.
“Every student deceived, defrauded and driven into debt … can rest assured that the Biden-Harris administration has their back,” he said.
Corinthian’s for-profit schools were not like traditional American universities. Most American universities are known as not-for-profit schools. That means they use money paid by students to cover their costs but they do not operate to make a profit like a business does.
There are hundreds of thousands of students who paid to go to the schools run by Corinthian, which failed financially in 2015. They decided to attend the schools based on false claims of success. The students borrowed money from financial aid programs run by the U.S. government.
Cardona said the company “exploited” students and “misled” them. He said they borrowed more and more money to pay for classes with the promise that they would find better jobs at the end of their studies.
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