Corinthian Colleges, a for-profit institution with 72,000 students spread over 100 campuses, closed in July 2014. If you have student loans for your education at Corinthian Colleges, you may find that relief isn’t too far off.
One of the largest for-profit colleges in the nation, Corinthian Colleges owns the following colleges:
- Everest College
- Everest College of Business, Technology and Health Care (Canada)
- Everest Institute
- Everest University
- Everest University
- Everest College
- Heald College
- QuickStart Intelligence
The company has been the subject of multiple investigations in various states as well as from the Consumer Financial Protection Bureau and U.S. Department of Education. As a result of these investigations into Corinthian’s marketing claims and allegations of altered grades and attendance, attendance has plummeted over the past year.
The U.S. Department of Education announced that it was temporarily withholding federal student aid money, which left Corinthian Colleges in dire financial straits. Last week, the company negotiated a settlement with the federal government that will lead to a complete dissolution of the company.
Discharge Of Federal Student Loans For Attendance At Corinthian
If you’re currently a student at any of the campuses owned by Corinthian Colleges and have federal student loans, you may be eligible for a discharge of those federal student loans if the college closes.
Under the School Closure Loan Discharge may qualify to get your Corinthian Colleges federal student loan wiped out. In order to qualify, you must meet these two simple criteria:
- Your school closed while you were enrolled and you could not complete the program of study for which the loan was intended; OR
- You were attending school within 120 days of the closure date or on an approved leave of absence when the school closed.
If the college campus is purchased by another college or university and transfers your credits or hours then you would not qualify for the Closed School Loan Discharge.
So, too, if you are completing a comparable educational program at another school or completed all of the course work for the program while at a Corinthian Colleges campus (even if you didn’t get your diploma).
If You Don’t Qualify For School Closure Loan Discharge
Some of the campuses owned by Corinthian Colleges will undoubtedly be sold to other entities, and credits may be transferred. Other students may not qualify for a discharge for various reasons.
If you find yourself saddled with federal student loans and no ability to discharge the debt, you should look into income-based repayment or Pay-As-You-Earn to lower your monthly payments. Though this isn’t a perfect solution to your Corinthian Colleges federal student loan problem, it’s a way to keep your debt repayment manageable.
Private Student Loans For Corinthian Colleges
Private student loans do not come with a discharge provision, nor can you lower monthly payments unless the lender agrees to do so.
For these private student loans, you may want to investigate other options such as bankruptcy or strategic default to bring the lender to the negotiation table. These options can come with serious credit and tax implications, so talk with a lawyer.
It’s Never Too Soon
Some Corinthian Colleges campuses will be closing, and others will be sold. Whatever happens, it will likely shake out in the coming weeks as the federal government moves in and starts taking action.
It’s a good idea to investigate your options and put together a plan of attack so that you’re prepared for all possibilities.
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