The cancellation amounts to the largest one-time discharge ever made by the Department of Education.
Some of Corinthian’s former students were already eligible for debt cancellation, but the new action will ensure that all borrowers who attended from Corinthian’s founding in 1995 through its closure in April 2015 will get debt relief.
At its peak in 2010, Corinthian Colleges enrolled more than 110,000 students at 105 campuses, including some called Everest, Heald College or WyoTech. The Department of Education has found that Corinthian Colleges misled prospective students about the ability to transfer credits and falsified its job placement rate.
Political pressure to cancel student debt
But the administration’s piecemeal approach to canceling student loan debt fails to satisfy many other Democrats who have been calling on Biden to broadly cancel up to $50,000 of student loan debt for each of the 43 million borrowers.
It’s not totally clear that the President’s executive authority allows him to broadly wipe away student debt. Last year, Biden directed lawyers at the Departments of Education and Justice to evaluate whether he does, in fact, have the power to broadly cancel federal student loan debt. The administration has not disclosed those findings.
Defrauded borrowers get relief
The fight to cancel Corinthian student debt began in 2014, when a group of students joined with a group called the Debt Collective. They organized the nation’s first student debt strike, refusing to make their student loan payments.
Former Corinthian students will now see their remaining federal student loan debt canceled automatically.
Students who believe they were defrauded by their college are generally required to file what’s known as a borrower defense to repayment claim with the Department of Education.
The Biden administration has been chipping away at a backlog of these claims that built up during the Trump administration. It has now canceled $7.9 billion for 690,000 borrowers whose institutions took advantage of them.
In some cases — like the action announced Wednesday — the government has decided that a whole group of students who attended a certain school at particular times are due relief. Advocacy groups say they hope the latest Corinthian action paves the way for future discharges for groups of borrowers.
“This announcement also sets the stage for future group-wide discharges for other for-profit schools including ITT Tech and Art Institute, and for broad based cancellation of all student debt,” said Thomas Gokey, co-founder of the Debt Collective, in a statement.
This story has been updated with additional information.
CNN’s Nikki Carvajal contributed to this report.