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U.S. will forgive $5.8 billion of loans to Corinthian Colleges students

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Students wait outside Everest College in Industry, Calif., hoping to get their transcriptions and information on loan forgiveness and transferring credits to other schools.
Christine Armario, AP

Students wait outside Everest College in Industry, Calif., hoping to get their transcriptions and information on loan forgiveness and transferring credits to other schools.

The U.S. Department of Education will forgive $5.8 billion of student loans for those who attended Corinthian colleges, a chain of for-profit schools that deceived students about their job placement rates and students' ability to transfer credits.

It is the agency's largest individual sum of student loan discharges.

The move, which was made Wednesday, will impact 560,000 borrowers, the Education Department said.

Vice President Kamala Harris sued the company in 2013, when she was California's attorney general, alleging it continuously used false advertisement in its recruitment practices. Several other investigations by regulators and the federal Education Department followed.

"For far too long, Corinthian engaged in the wholesale financial exploitation of students, misleading them into taking on more and more debt to pay for promises they would never keep," Secretary of Education Miguel Cardona said.

Students affected do not have to take any further action to secure their funds, and the agency will begin notifying those students soon, it said.

Corinthian Colleges, Inc. was founded in 1995 and later acquired several for-profit schools across the country.

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In 2010, more than 110,000 students were enrolled across its 105 campuses, which included Everest colleges.

In 2014 and 2015, Corinthian had either sold or closed all of its campuses.

In 2016, Harris and the state of California won a judgment of $1.1 billion in their case, including $820 million in restitution on behalf of the students and $35o million in civil penalties.

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