LOS ANGELES (CBSLA) — Thousands of ex-Corinthian Colleges students are anxiously awaiting the outcome of a Monday court hearing that could determine whether they still have to pay the loans they took out to attend the now-closed, for-profit colleges.
Santa Ana-based Corinthian Colleges, which had been the nation’s largest for-profit educational institution, collapsed in 2015 amid a cash shortage and fraud allegations, and left thousands of students in the lurch without a degree but saddled with heavy student loan debts.
Immediately after Corinthian Colleges collapsed, the Obama Administration announced a debt relief plan to make it easier for students who had attended the now-defunct school to get rid of their federal loans. But the loan forgiveness program changed under the Trump Administration, now providing “tiers of relief to compensate former Corinthian students based on damages incurred.”
The previous regulatory process yielded a “muddled process that’s unfair to students and schools and puts taxpayers on the hook for significant costs,” Department of Education Secretary Betsy DeVos said at the time changes were announced.
At Monday’s hearing, attorneys representing the students are urging the U.S. Department of Education to bring back the more extensive loan forgiveness program.
When the loan forgiveness program changes were announced, the Department of Education said it had already approved the discharge of 12,900 pending claims submitted by former Corinthian Colleges students, and denied 8,600 claims.
Corinthian Colleges, which operated more than a dozen campuses in California, operated under names including Everest College and WyoTech College.