U.S. wiping away $5.8 billion in debt for Corinthian Colleges borrowers, including 3,320 students in Wisconsin
More than 3,300 Wisconsin borrowers who attended Corinthian Colleges, a chain of for-profit schools that deceived students about job placement rates, will see their debt wiped away.
In what's described as the largest single discharge of student debt by the U.S. Department of Education, the federal agency is forgiving $5.8 billion borrowed by students who attended a campus owned or operated by Corinthian from 1995 through its 2015 closure. The move announced this week helps 560,000 borrowers nationally, including 3,320 in Wisconsin who will receive $36.2 million in full loan discharges.
“Corinthian’s predatory practices unfairly left people across the country with substantial debt, and this action is long overdue,” Attorney General Josh Kaul said in a statement.
The debt discharge will be automatic, meaning former Corinthian students will not have to apply to have their debts canceled.
More than 110,000 students enrolled at 105 campuses across the U.S. at Corinthian's peak in 2010. The for-profit briefly operated a Milwaukee campus called Everest College that year and touted a national job placement rate of 80% to 90% to prospective students.
Everest closed abruptly in 2013 and Wisconsin filed a lawsuit the following year, alleging that the job placement rate was really as low as 5%. Students rarely got the externships they were promised and if they did, they discovered the training had no relation to their coursework. The complaint also accused Corinthian of signing up students who were not remotely qualified to succeed in certain programs or who could not have gotten jobs in the field because of their criminal records.
According to the state's lawsuit, Everest students typically borrowed up to $20,000 to pay for the eight- to 12-month programs meant to lead to jobs as a massage therapist, medical assistant, or pharmacy technician.
Corinthian was ordered to pay $9.4 million in losses sustained by Wisconsin consumers as a result of the lawsuit, according to the state Department of Justice.
Contact Kelly Meyerhofer at kmeyerhofer@gannett.com. Follow her on Twitter at @KellyMeyerhofer.
This article originally appeared on Milwaukee Journal Sentinel: Corinthian Colleges students, including 3,320 in Wisconsin, lose debt
