Biden's Education Department just wiped out $5.8 billion in student debt for all remaining borrowers defrauded by Corinthian Colleges

• The Education Department canceled $5.8 billion in student debt for 560,000 former Corinthian College students.
• Corinthian shut down in 2015 following accusations of predatory behavior that misled students.

On Wednesday, President Joe Biden's Education Department announced all remaining student-loan borrowers who attended now-defunct, for-profit Corinthian Colleges are getting their debt balances wiped out.

The announcement approved $5.8 billion for a group student-loan forgiveness claim that covers 560,000 former Corinthian students.

Corinthian shut down in 2015 following a number of investigations that found the school engaged in predatory behavior that pushed students to take out loans when that was not the best option for them. Since then, the department has approved borrower defense to repayment claims — a type of loan relief for borrowers defrauded by for-profit schools — for some groups of students who went to Corinthian.

Wednesday's announcement is the biggest group approval the department has acted on to date, and it will include borrowers who did not submit relief claims themselves.

"As of today, every student deceived, defrauded, and driven into debt by Corinthian Colleges can rest assured that the Biden-Harris Administration has their back and will discharge their federal student loans," Secretary of Education Miguel Cardona said in a statement. "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."

According to the press release, the Education Department will begin notifying impacted students of this relief, and borrowers will not have to take any additional action on their own.

So far, Cardona has approved more than $2 billion in borrower defense claims for former for-profit students, including some from Corinthian, ITT Technical Institutes, and Marinello Schools of Beauty. But those actions have still left many borrowers who submitted claims waiting for relief.

In March, Insider reported that 16 Democratic lawmakers, including Massachusetts Sen. Elizabeth Warren, urged Cardona to act on the remaining claims for Corinthian students, saying that the Education Department has processed those claims in "a complex and piecemeal fashion" that has "delayed relief for thousands of borrowers while seemingly denying thousands of others any relief at all."

"For the estimated 350,000 students defrauded by Corinthian, which closed its campuses in 2015, the wait for debt cancellation has spanned three presidential administrations," the lawmakers wrote.

Since Corinthian shut down following investigations of predatory behavior, like misleading students into taking out unaffordable debt, former students have been fighting for the relief themselves. A group of borrowers known as the Corinthian 15 met with the Debt Collective — the nation's first debtor's union — and prepared for a debt strike that has now turned into 200 students and counting fighting for their borrower defense claims to be approved.

"This has been a long time coming and it's something that we've wanted for ever," Nathan Hornes, one of the original 15 strikers, said during a Wednesday press call. "It's a powerful moment, and it's a moment that I don't take for granted," Hornes added. "But there's so much more work to be done. This it doesn't stop here. The buck does not stop with us."

During her time as attorney general in California, Vice President Kamala Harris also took action against Corinthian. In 2016, she secured a $1.1 billion judgment against Corinthian, providing restitution payments for former students defrauded by the for-profit chain.

Along with student-loan relief, some of Biden's top officials have vowed to ensure for-profit schools are held accountable for bad behavior. At the end of last year, Federal Student Aid head Richard Cordray said that "more needs to be done to prevent people from abusing these student aid programs, from cheating taxpayers, from cheating students."

Wednesday's widespread relief also comes as Biden is working toward making a decision on broad student-loan forgiveness for federal borrowers. While Biden himself has not confirmed a specific relief amount, recent reports have suggested he is looking at $10,000 in forgiveness for borrowers making under $150,000 a year.