Washington • More than 3,000 former Corinthian College students will have their college loans erased, the first wave of debt relief tied to the collapse of the for-profit higher education chain. The potential cost to taxpayers if all Corinthian students seek relief: $3.2 billion.
So far, almost 12,000 students have asked the federal government to discharge their college loan debt, asserting that their school either closed or lied to them about job prospects, according to a report released Thursday by the Education Department.
About 3,100 closed-school claims have so far been approved — totaling about $40 million in student loans, the department said.
While unprecedented, the figures represent just a fraction of the students who might qualify for debt relief.
Education Undersecretary Ted Mitchell told reporters in a media call that processing remaining claims will take some time. "Borrowers and taxpayers are counting on us to get this right," he said.
For 33-year-old Tasha Rincon, a mother of three, relief from her government loans for Corinthian cannot come soon enough.
Rincon says she can't even afford to buy groceries and is working three hours a day in a school cafeteria about an hour away from her home in Lake Elsinore, Calif.
"It's just not fair," said Rincon, who graduated in 2012 from Corinthian's Everest College with an associate degree in criminal justice and a bachelor's degree in business management. She's earning nowhere close to the $45,000 that recruiters had promised her.
She owes more than $43,000 in student loans and is waiting to hear from the Education Department whether her loans will be erased.
As of last month, most of the nearly 12,000 claims that have been filed are Corinthian-related, and they represent a spike in a "borrower's defense" claim. With such a claim, students can ask for loan forgiveness if they believe they were victims of fraud.
Mitchell said the borrowers' defense claims are "new territory" for the department.
Before Corinthian, officials say they knew of five or so "borrower's defense" cases in the past 20 years. After Corinthian's demise, 4,140 such claims have been filed since the department's June announcement it would make the debt-relief process easier. An additional 7,815 Corinthian students have filed claims for debt-relief because their school closed, officials said.
FILE - In this Dec. 3, 2013, file photo, Hampton Creek Foods CEO Josh Tetrick holds a species of yellow pea used to make Just Mayo, a plant-based mayonnaise, in San Francisco. The Agriculture Department says it is looking into documents that show that an egg industry organization under government oversight tried to harm sales of an imitation mayonnaise. According to email documents provided to The Associated Press, the American Egg Board tried to prevent Whole Foods retailers from selling Hampton Creek's eggless Just Mayo spread. The egg board is one of many industry promotional boards overseen by USDA but paid for by the industries themselves. By law, the boards cannot disparage other commodities. (AP Photo/Eric Risberg, File)
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