Students Of Bankrupt For-Profit Colleges Have Their Loans Forgiven
SAN FRANCISCO (CBS SF) – Federal education officials have announced they were forgiving $171 million in student loans owed by those who were attended Heald, Everest and WyoTech colleges at the time they were closed last year.
In all, nearly 9,700 students who attended the Corinthian Colleges Inc. schools in California would be granted some level of debt relief.
Department of Education officials said the average amount of debt relief per student amounted to about $15,280.
The current relief package covers federal student loans taken out in 2010 and more recently.
Corinthian, the for-profit parent company of Heald, gave little advance notice that it was shutting down all instruction at 28 campuses in May 2015.
The closure came less than two weeks after the Department of Education announced it was fining the for-profit institution $30 million for misrepresentation for inflating job placement numbers.
In March, a San Francisco Superior Court judge ordered Corinthian to pay $820 million to the students, but when the parent company filed for bankruptcy it listed just $143 million in liabilities and $19 million in assets.
The government invoked a law that forgives federal student loans for students who attended school that closed before they were awarded a degree.
