You could be on the hook for $200 million from Corinthian Colleges closure
Taxpayers could be footing a more than $ 200 million bill for the collapse of embattled for-profit college chain Corinthian Colleges.
If all 16,000 students enrolled at Corinthian when it closed request to have their debts relieved, it will cost the government approximately $ 214 million, according to a Department of Education official. (This figure was first reported by Bloomberg.)
Corinthian, once one of the largest for-profit college chains in the country, shut down all 28 of its remaining campuses Monday, after months of probes and lawsuits accusing the company of using inflated graduation and job-placement statistics to lure students to take on high levels of debt. Now, many Corinthian students are eligible for what’s called a closed-school discharge, a mechanism that relieves students of the obligation to pay back their federal loans if they can’t finish their program or the school shuts down within 120 days after they withdraw from the school.
Students who decide to finish their programs elsewhere likely won’t be eligible for the discharge. The Department of Education is reaching out to affected students with information about their options, including a list of nearby schools where they might be able to transfer.
Corinthian agreed to a deal with the Department of Education last July to sell or close all of its campuses. If the chain had shut down in September, when there were more students, taxpayers could have been on the hook for up to $ 639 million in closed-school loan discharges, according to a Department official.
Corinthian officials argued in a statement announcing the campus’ closing that federal and state regulatory pressures, which made it difficult to sell off its remaining campuses, forced the company to abruptly shut down. “We are now doing what we can for our students by trying to work with other schools to provide continuing educational opportunities,” Rosemary Wilson, a Corinthian spokeswoman, wrote in a statement.