How to apply for student loan forgiveness if you went to a Corinthian Colleges school

Mandi Woodruff-Santos
In this July 8, 2014 file photo, a woman walks past the Everest Institute in Silver Spring, Md. Corinthian Colleges owns Everest, Heald College and WyoTech schools.

In the ongoing saga of defunct for-profit university Corinthian Colleges, the federal government announced Friday that more relief is coming for thousands of students who attended the schools.

Corinthian Colleges, Inc. was shut down in 2014 after a federal investigation revealed rampant fraud at its more-than 100 campuses, where schools routinely published inflated job placement rates and used aggressive recruiting practices to lure new pupils. Last week, a California superior court judge ordered the company to pay $1.2 billion in restitution to students and investors it defrauded, which makes the $30 million fine levied by the Department of Education last summer pale in comparison. There’s no telling if the company will have the funds to meet either requirement, as it filed bankruptcy last year.

Former students’ best shot at relief has been loan forgiveness. Federal regulators approved more than $132 million in loan forgiveness for more than 8,000 former Corinthian students. That’s a fraction of the estimated 500,000 students who attended Corinthian-owned schools between 2010 and 2014.

The majority of relief was granted to students who attended Corinthian-owned Heald College, a chain of 12 schools on the West Coast that was abruptly shuttered last spring. There are already rules in place to offer loan forgiveness to students whose schools close, called a closed school loan discharge.

Dozens more Corinthian schools were purchased in a $24 million deal with privately-held Zenith Education Group. For students at these schools, the road to debt forgiveness has been less straightforward because the schools didn’t actually close. The Department of Education has set up a new way for those students to apply for loan forgiveness, called Borrow to Defense to Repayment. Students can now apply for federal student loan forgiveness through this online form. But not everyone will qualify. For starters, the relief only applies to federal direct loans, and not Federal Family Education Loan (FFEL) Program loans or Federal Perkins Loans. Students must have also studied in certain qualifying programs.

Read more: Who Killed Heald College? A Yahoo Finance Investigation >

Activists behind the Occupy Wall Street off-shoot Debt Collective said they were less than thrilled with the department’s relief plan, calling it a “slap in the face” to thousands of students who still won’t qualify for relief.

“Closed school discharge affects a very small percentage of people who were actually going to school when Corinthian folded,” said Laura Hanna, a spokesperson for the group. “All other [students with Family Education loans] currently have no path for relief.” For more than a year, the group has petitioned the Education Department to forgive student loans of all Corinthian students regardless of when they attended or what they studied with little success.  

In a statement, Department of Education Under Secretary Ted Mitchell said the process for student debt forgiveness is a work in progress. "To ensure students defrauded by other institutions can be made whole, the Department is currently drafting rules to simplify the process for submitting borrower defense claims," he said.

To see a full set of guidelines for student loan forgiveness, visit this fact sheet posted by the Department of Education.

We’ve got a brief summary below:

Who qualifies for loan forgiveness:

HEALD STUDENTS (or any student who was enrolled in or withdrew from one of the Corinthian-owned schools that closed April 27, 2015) may qualify for closed school student loan discharge. Fill out that form here online. Loan forgiveness applies to all federal direct loans, Federal Family Education Loans and Perkins loans, including reimbursal of payments already made.

Important exception: This doesn’t apply to students who completed their degrees at Heald. You cannot qualify if you have already enrolled in a similar program at another school. You must have studied in a qualifying program at Heald schools or Everest and WyoTech schools.

EVEREST, WYOTECH STUDENTS: If you attended any Corinthian-owned campuses between 2010 and 2014, whether it closed or remained open, you may apply for loan forgiveness through the Borrower Defense to Repayment process. You can apply by filling out this form online.

Again, there are some important conditions to qualify:

-You must have attended between 2010 and 2014

-You must have studied in a qualifying program at Heald schools or Everest and WyoTech schools

-You can only discharge Federal Direct Student Loans, which excludes students with Federal Family Education Loan (FFEL) Program loans, or Federal Perkins Loans.