The White House announced Thursday that individuals who borrowed money to attend a school owned by Corinthian Colleges – a for-profit institution that closed in 2015 – will have their federal student loans canceled.
Total cost to taxpayers: $5.8 billion – the largest amount of student debt the federal government has erased in one action.
The debt discharge will benefit more than a half-million borrowers, according to USA Today.
Corinthian Colleges closed in 2015 after the Education Department cut off the for-profit institution’s ability to access federal money. The organization had a long history of defrauding students prior to its closure. The original complaint against the school alleged it targeted poor Californians via ads and marketing campaigns that misrepresented the likelihood of students finding jobs.
The White House is actively considering wider student loan forgiveness for federal borrowers.
The current pause for payments on federal student loans is set to expire at the end of August.
Vice President Kamala Harris will formally announce the debt cancellation Thursday at the Education Department.
As California’s state attorney general, Harris secured a judgment against the institution that resulted in $1.1 billion in relief for former students.
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