Veterans Swindled by Shuttered For-Profit Corinthian Colleges Get Loan Debt Erased

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In this April 28, 2015, file photo, students wait outside Everest College in Industry, Calif., hoping to get their transcriptions and information on loan forgiveness and transferring credits to other schools. Corinthian Colleges shut down all of its remaining 28 ground campuses on April 27, displacing 16,000 students. (AP Photo/Christine Armario, File)

Navy veteran Jerome Biggins was promised a job as soon as he graduated from Heald College, which was owned by the for-profit Corinthian Colleges chain.

Instead, he ended up with at least $30,000 in debt from student loans and no job in his field of information technology for a decade.

But now, the debt that has prevented him from moving on with his life, including buying a home, will be erased after the Biden administration last week announced it was forgiving all $5.8 billion remaining in federal loan debt for 560,000 borrowers who attended the now-shuttered Corinthian Colleges.

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"It was like a huge load off my back, something that's been plaguing me for many years," Biggins told Military.com in an interview about his reaction to the Biden administration's move. "I just felt like I was used, and I was taken advantage of, and I didn't really get anything out of it that I was supposed to. So, at least having this off my back gives me a lot of relief mentally, emotionally, financially, everything."

Corinthian, which ran a chain of for-profit colleges from 1995 to 2015, shut down after the Department of Education slapped it with a $30 million fine for falsifying job placement data, grades and attendance records.

Biggins is one of potentially hundreds, if not thousands, of veterans scammed by Corinthian who will no longer have to pay back any outstanding loans after the Biden administration's debt discharge.

It is unclear exactly how many veterans are among the 560,000 covered in Thursday's announcement, with an Education Department official saying the agency did not track borrowers' veteran status. But Corinthian was known to aggressively target veterans for enrollment and even sign some up for loans without their knowledge.

"When Corinthian shut down, all these veterans had collection agencies coming after them for loans" they were unaware of, Carrie Wofford, president of advocacy group Veterans Education Success, said in an interview with Military.com. "Finally, the veterans are gonna stop being hassled by collection agencies for fraudulent loans."

Corinthian students had previously been able to apply for debt relief known as "borrower defense." But last week's move -- announced by Vice President Kamala Harris, who investigated and sued Corinthian when she was California's attorney general -- wipes out all remaining loans without any further action needed by the veterans and other borrowers.

Some veterans and other borrowers may also get money back from the federal government or have their ability to access future federal financial aid restored, depending on their specific circumstances, said an Education Department official, who spoke to Military.com on the condition of anonymity under terms set by the department.

The year Corinthian closed, at least 422 veterans were actively enrolled there, according to a 2016 Senate report. Thousands more attended in the years prior, with the Senate report noting 6,427 veterans were enrolled in the 2012-13 academic year.

"I can't tell you how many of the 560,000 [getting debt relief] are veterans, but I think it's highly likely there are at least a decent number," the Education Department official said. "We know this company was a major recipient of veterans benefits. It had a business model incentive to go after them."

Corinthian was one of the top 10 recipients of veterans benefits before it shut down, the official added.

One of the incentives to target veterans was what was known as the 90/10 loophole. Under federal law, for-profit colleges have to get at least 10% of their revenue from sources other than the Department of Education. GI Bill benefits used to be allowed to be part of that 10%, motivating for-profit colleges to enroll veterans, until a law was passed in 2021 closing that loophole.

Corinthian was found to have tricked veterans into enrolling by having sales people pose as "Pentagon advisers" and using official military seals in marketing materials, Wofford said.

Biggins, the Navy veteran, said he did not encounter those tactics, but was sold on attending Heald pretty easily after being guaranteed a job upon graduating.

"They said something along the lines of that because I'm a Heald student and a veteran, that I will be looked upon as respected by companies, and a lot of them would hire veterans for the sole purpose that we understand the attention to detail," recalled Biggins, who attended Heald from 2000 to 2002 after serving in the Navy for four years.

Many veterans used their GI Bill benefits at Corinthian, but still have loans for several reasons. In addition to Corinthian's practice of signing people up for unauthorized loans, some veterans who used the GI Bill also applied for loans because the benefits didn't cover all their costs, or because Corinthian pressured them into applying for loans, Wofford said.

Biggins said Corinthian tricked him into taking out a loan on top of using his GI Bill benefits by drowning him in paperwork and pressuring him to sign it before he could think about whether a loan made sense.

"Everything happened so quickly," he said. "I believe that they either filled out the paperwork for me or they had me do it in their office, and then I started getting all this paperwork that I didn't understand, and it happened to be related to the student loans."

While Wofford celebrated the loan relief, she also said many veterans won't be whole again until Congress restores all the GI Bill benefits Corinthian tricked them out of.

In 2017, Congress passed a law restoring GI Bill benefits for those who were enrolled within 120 days of the school closing. But that still leaves the "vast majority" of veterans cheated out of those benefits with no recourse, Wofford said.

"Congress has not yet agreed to pass a law that would give you your GI Bill back if you were scammed," she said, "and that's a travesty."

-- Rebecca Kheel can be reached at rebecca.kheel@military.com. Follow her on Twitter @reporterkheel.

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