Getting a student loan discharged is not easy. Even bankruptcy is not usually enough to shake off that debt. But recent students at schools under the Corinthian Colleges Inc. [CCI] umbrella (Everest, WyoTech, Heald) will get the chance to request that some of all their federal student loan obligation be lifted.

The Dept. of Education announced today that students who attended (after June 20, 2014) the 30 CCI campuses that closed in April [PDF] have two options:

1. Apply for a closed school loan discharge, which would get rid of the obligation to repay and reimburse the student for any payments made; or

2. Transfer earned credit to another institution to continue their education in a comparable program.

Taking the second option and continuing your education does not mean you give up your right to some relief. If you believe that you were a victim of fraud (or any other legal violation) by a CCI school, you can make a claim for debt relief under a legal rule called “borrower defense to repayment.”

When you apply for a borrower defense, you can have your federal loans put into forbearance so that you’re not making payments (but you don’t get in trouble for not making them) while your claim is being resolved. If a borrower is already in default, they may request a stop to collection activity.

In either case, interest will continue to accrue pending the outcome of the dispute. Borrowers can opt out of the forbearance if they wish.

If you are a Corinthian student seeking debt relief of either type, please visit the FSA website or call toll-free at (855) 279-6207 and a staff member will provide the information you need.

To expedite dispute resolutions regarding CCI student loans, the Dept. of Education is acknowledging that Corinthian misrepresented job placement rates for a majority of programs [PDF] at its Heald College campuses between 2010 and 2014. Students in the programs listed in the PDF during that time are entitled a discharge of their Federal Direct Student loans if they can claim they relied on those fraudulent placement rates in deciding to attend Heald.

Affected Heald students can fill out this form (NOTE: We had trouble opening this PDF with Chrome) and send it to the Department of Education with required attachments by email to FSAOperations@ed.gov
or by regular mail to:
Department of Education,
PO Box 194407,
San Francisco, CA 94119

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