More than 85,000 additional students who attended campuses owned by now-bankrupt Corinthian Colleges Inc. will be eligible for expedited debt relief, federal and state officials announced Tuesday.
The announcement will have the biggest impact on California students who attended Corinthian's Everest College and WyoTech campuses between 2010 and 2013, along with students across the country who attended Everest University online.
The move comes as part of a continuing investigation by the U.S. Department of Education and California Atty. Gen. Kamala Harris into inflated job placement rates claimed by Corinthian, once among the nation's largest operators of for-profit colleges.
Corinthian filed for bankruptcy protection in May after closing down and selling off its schools. The collapse came after a yearlong crackdown by the Education Department, which withheld crucial federal funding from the schools amid evidence the company was misleading students.
Based on new findings from the investigation, officials said there was enough evidence to conclude that Everest's California and online campuses, along with California WyoTech schools, had deceived students by overstating job placement numbers.
"These students worked hard, they paid for school and took on debt," Harris said Tuesday. "The least we can do now is give them the relief they deserve."
The announcement will fast-track the process of erasing student loan debt for those who attended Everest and WyoTech campuses in California, and those who attended Everest online. It adds to a similar finding in June that expedited the debt relief process for students who attended Corinthian's Heald College campuses.
Other Corinthian students with the clearest path to loan forgiveness are those who were attending its schools that abruptly closed in April. So far the Department of Education has received more than 10,000 applications for student loan discharges from closed schools; about half of those have been approved.
Harris' office alleged in a lawsuit filed in 2013 that Corinthian had overstated job placement rates by counting graduates who were employed at temporary staffing agencies or one-day health fairs. In some cases, according to the complaint, Corinthian had paid staffing agencies to hire students in order to satisfy accrediting entities.
Students who attended Corinthian campuses in other parts of the country can also apply for loan forgiveness, but must prove they are entitled to relief on an individual basis. Education Department officials said they were continuing to investigate Corinthian's job placement practices.
The agency this summer appointed Joseph A. Smith, who is overseeing the $25-billion national mortgage settlement, as a special advisor for Corinthian student debt claims.
Since 2010, Santa Ana-based Corinthian had enrolled nearly 350,000 students who took out federal loans worth about $3.5 billion.