If you attended a Corinthian College—Everest Institute, Everest College, Everest University, Heald College, or Wyotech—you might qualify to have 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.
On December 13, 2018, the U.S. Department of Education announced it would forgive $150 million in federal student loans for students who attended a closed school. Under amended federal regulations (81 FR 75926), the William D. Ford Federal Direct Loan (Direct Loan Program), Federal Family Education Loan (FFEL Program), and Federal Perkins Loan (Perkins Loan Program) programs now provide for the automatic discharge of loans if, among other things, a borrower could not complete his or her program of study because the borrower’s school closed.
Specifically, 34 C.F.R. § 685.214(c) (Direct Loan Program), 34 C.F.R. § 682.402(d)(8)(ii) (FFEL Program), and 34 C.F.R. § 674.33(g)(ii) (Perkins Loan Program) provide for an automatic discharge of some or all of the Direct Loan, FFEL, or Perkins Loan program loans an eligible borrower—or, if applicable, the dependent child on whose behalf a parent took out a PLUS loan—obtained to attend a school that closed on or after November 1, 2013.
You're eligible for an automatic closed school discharge if you:
If you don't want to wait three years for the automatic discharge, you may apply earlier—as soon as the Department of Education confirms the school's closure date. Also, if you don't get an automatic closed school discharge based on your attendance at a school that closed three or more years ago, but you otherwise meet eligibility requirements for a closed school discharge, you should submit a closed school discharge application. Contact your loan servicer for more information on how to do this.
For more information on closed school discharges, review the Department of Education's December 13, 2018 announcement. You can also go to U.S. Department of Education's website on closed school discharges to get more information.
In addition, if you don't qualify for a closed school discharge, you might qualify for loan forgiveness based on a borrower defense to repayment if you can prove that the school defrauded you.
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 firstname.lastname@example.org 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.
Updated December 17, 2018