41,000 Former Students Benefit from Student Loan Debt Settlement

You might have heard that certain students who took out student loans to attend a now-closed for-profit college could end up having the balance of their loans discharged. According to a recent article in Consumer Affairs, approximately 41,00 former students will benefit from a settlement involving Corinthian Colleges. On average, each student will receive relief in the amount of $6,500. Those tens of thousands of students who borrowed money to receive an education from Corinthian Colleges will see some of their student loan debt disappear.
How did this settlement arise? Is Corinthian the only institution from which students can be eligible for student loan cancellation? What students can be eligible for a refund from the settlement?
Former College Students and Eligibility for Federal Student Loan Cancellation in Illinois
In April, Illinois Attorney General Lisa Madigan’s office issued a press release informing former students—along with attorneys general from 44 states in total—that they should learn more about their eligibility for having their federal student loan debt cancelled. We previously discussed Corinthian Colleges, the “borrower defense,” and allegations that the for-profit business misled students when they enrolled them in the institution. Back in early 2016, a relatively small number of students who attended Corinthian College had their student loans erased. Now, as the press release notes, as of April 2017, “more than 5,800 Illinois residents who attended Corinthian schools are eligible for federal student loan relief.”

You read that correctly: We are not talking about private student loans here, which often are the subject of student debt and bankruptcy. Rather, students who attended Corinthian, including a number of schools operated by the for-profit business Corinthian Colleges Inc., may not have to repay federal student loans. The list of schools that were operated by Corinthian Colleges Inc., and from which student loan debt may be cancelled, includes:
  • Everest Institute;
  • Everest College;
  • Everest University;
  • Heald College; and
  • WyoTech.
If students have their federal loans from any of these schools cancelled, they will not have to make any additional payments on that student loan debt. Moreover, for students who have already made payments, those students may be eligible to receive a refund.
“Sham Loans” Cost Student Debtors
According to Illinois Attorney General Lisa Madigan, students who borrowed federal money to attend Corinthian schools were duped. As she explains, “these were sham loans used by for-profit schools and lenders to access federal taxpayer dollars to fund programs that did nothing to help students get ahead.”
The Consumer Affairs article discusses how Corinthian recently entered into a settlement with federal and state agencies, which is now in its final stages. This particular settlement affecting 41,000 students concerns those who borrowed from Aequitas Capital to finance their educations at Corinthian schools. It is important to keep in mind that this settlement represents only one way in which student debts connected to Corinthian schools may be erased. Student borrowers should learn more about options for Illinois residents who were impacted by Corinthian Colleges Inc.
Contact an Oak Park Consumer Protection Lawyer
Do you have questions about your student debt and a for-profit college you attended? You may be eligible for student loan cancellation, and an Oak Park consumer protection lawyer can help. Contact the Emerson Law Firm to discuss your case.
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