Student Loan Forgiveness: How will this automatic forgiveness work?
On June 1, the U.S. Department of Education (Department) released an official statement to announce
that over half a million borrowers will receive 5.8 billion dollars in full loan discharges.
Considered as the largest single loan cancellation scheme in the Department's history, this initiative aims
to discharge all federal student loans borrowed to attend
any campus owned or operated by Corinthian Colleges Inc., which closed in April 2015.
The student loan cancellation program called Borrower Defense to Repayment
allows students who have been defrauded or misled by their school via
misrepresentations about admissions, credit transferability, or career prospects, to request loan forgiveness.
Corinthian collapsed back in 2015 following several investigations into its activities,
with lawsuits filed against the schools suggesting that they intentionally misrepresented job placement rates and engaged in false advertising.