Department of Education forgiving $171 million in debt owed by students of a bankrupt for-profit college

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(Image credit: An Everest University campus.)

The U.S. Department of Education will forgive $171 million of debt owed by more than 11,000 former students of the for-profit school Corinthian Colleges Inc., which declared bankruptcy in 2015.

The government is forgiving the loans under a federal law known as the "borrower defense," the Los Angeles Times reports, which relieves the debt of people able to prove they've been defrauded. The now-defunct Corinthian ran several colleges, including Heald, Everest, and WyoTech, which had high tuition rates and few admission requirements. In March, a judge in San Francisco County found that Corinthian made false or misleading statements about job placement rates for graduates, and the company was ordered to pay $820 million to students. When it claimed bankruptcy, Corinthian claimed to have $143 million in liabilities and only $19 million in assets.

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Catherine Garcia, The Week US

Catherine Garcia is night editor for TheWeek.com. Her writing and reporting has appeared in Entertainment Weekly and EW.com, The New York Times, The Book of Jezebel, and other publications. A Southern California native, Catherine is a graduate of the University of Redlands and the Columbia University Graduate School of Journalism.