In the largest instance of student loan forgiveness ever made by the government, the U.S. Department of Education last week announced that it will discharge all student loans taken out for attendance at Corinthian Colleges. Here’s what to know about this week’s student loan news.
1 current trend within student loans for the week of June 6, 2022
1. Former Corinthian Colleges students to receive full federal student loan cancellation
The Education Department recently announced that students who attended any institution owned by Corinthian Colleges will be receiving full federal student loan forgiveness. More than 500,000 former Corinthian Colleges students will have their debt discharged, with more than $5.8 billion forgiven in total.
The forgiveness comes in the form of borrower defense to repayment, a program designed to help students who have been defrauded by their schools. Corinthian Colleges has faced years of litigation, allegedly misleading students about their future job prospects and their ability to transfer course credits to another institution. While some debt has been discharged since the company closed in 2015, this latest action by the Education Department resolves the remaining debt for former students.
How this affects student loans
Affected students don’t need to take any further action and don’t need to apply for borrower defense if they have not already done so. The Education Department will be sending out notices to students who qualify, and eligible loans will be discharged automatically in the next few months.
Here’s how you can get prepared
Whether you’re new to student loans or well into repayment, it’s wise to stay informed about how your student loan rates could change. During 2022, more opportunities for cheaper loans or loan forgiveness could open up; keep an eye on the Bankrate student loans news hub for the latest trends.