If you attended a Corinthian College—Everest Institute, Everest College, Everest University, Heald College, or Wyotech—you might qualify to have some or all of your federal student loans discharged (also known as a “student loan cancellation” or as “student loan forgiveness”). Also, California residents might qualify for a state program that reimburses students for amounts spent on tuition to attend a Corinthian College. Read on to learn more.
Corinthian Colleges, Inc. was a company that ran for-profit schools (Everest, Heald, and Wyotech), which became well-known for using deceptive advertisements and aggressive marketing techniques that misrepresented job placement rates.
Who Corinthian targeted. Corinthian typically targeted low-income, vulnerable people who had to take out large student loans in order to attend school. After graduation, though, many students found that they were unable to repay their federal student loans and private loans when their Corinthian education failed to lead to good-paying jobs. As a result, former Corinthian students often ended up defaulting on their loans.
Corinthian shuts down. After the federal government and other authorities investigated Corinthian’s shady practices, the company initially sold most of its schools and then, on April 27, 2015, Corinthian shuttered its remaining locations.
Student loan relief. Because of Corinthian’s school closures and deceptive practices, former Corinthian students often qualify for forgiveness of their federal loans.
If you are a former Corinthian student and have federal student loans, you may qualify for a loan discharge if:
If you attended any of the Corinthian schools that closed on April 27, 2015, you might qualify for a discharge. To qualify for this type of discharge, you must meet the following criteria:
Those who qualify get a complete discharge of their federal Direct Loans, Federal Family Education Loan (FFEL) Program loans, or Federal Perkins Loans taken out to go to the closed school and get a reimbursement for amounts already paid. (Learn about different types of federal student loans.)
Borrowers who believe a Corinthian school defrauded them—or that the school violated state law in some other way—might qualify for a discharge of their federal Direct Loans (including parent PLUS loans).
Who generally qualifies for this kind discharge. The U.S. Department of Education has found that between 2010 and 2014, Corinthian misrepresented job placement rates for a significant number of its programs. For this reason, students enrolled in the covered programs during certain time periods may apply for a discharge of their federal Direct Loans. (Learn more about filing for this type of loan discharge, called a borrower defense to repayment).
Putting your loans into forbearance and stopping collections. Corinthian students that submit a borrower defense to repayment claim may have their federal student loans placed into forbearance—or have collection activity stopped—for as many as 12 months if a federal loan servicer services those loans (or if the loans are in default and a private collection agency services the loans). If you want your federal loans placed in forbearance or for collections to stop, be sure to select that option on your discharge application.
Process for determining amount of forgiveness. Under revised standards, as of December 2017, this kind of student loan discharge will follow a tiered system based on income. Students with the lowest earnings receive full loan forgiveness, while borrowers with higher earnings get partial loan forgiveness. Specifically, students who earn less than 50% of their peers who graduated from similar programs at other schools will receive full relief. Students who earn 50% or more of their peers will get proportionally tiered relief to compensate for the difference. According to a table published by the U.S. Department of Education, an affected student making 70% of a peer's income would get 30% loan relief. An affected student making 90% of a peer's income would get only 10% loan relief.
To apply for a discharge of your federal student loans under the closed school program or the borrower defense to repayment program, contact your loan servicer or go to https://studentaid.ed.gov and search for “Information about Debt Relief for Corinthian Colleges Students.”
California residents enrolled at Corinthian Colleges campuses in California and residents who were enrolled in an out-of-state Corinthian Colleges distance education program as of June 20, 2014, or who withdrew within 120 days of this date, may qualify for reimbursement of private student loans and other money spent on tuition under the state’s Student Tuition Recovery Fund (STRF).
To learn more about the Student Tuition Recovery Fund in California, go to the California Bureau for Private Postsecondary Education website. You can also email email@example.com or call 888-370-7589.
The California Attorney General’s website provides an interactive tool for Corinthian students to learn more about their rights and what they can do to protect themselves.
If you're a resident of a state other than California—or you don't qualify for relief under the STRF—and want to find out if you have any options for discharging private loans you took out to attend a Corinthian school, contact your private loan lender.