Three weeks ago, Corinthian Colleges, one of the largest for-profit U.S. educational institutions, was forced to close all of its campuses because of bankruptcy, leaving 78,000 students out in the cold and the government with $200 million of federal student loan debt. Because the government forced Corinthian’s closure, the students concerned could apply for their debts to be fully discharged.
Unsurprisingly, they have now done so. Secretary of Education, Arne Duncan, has now formally received a group request asking for “loan forgiveness” from the 78,000. Continued government pressure on for-profit institutions could well result in further closures, leading to petitions for loan forgiveness from hundreds of thousands of students, with debts well into the tens of billions.
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