Education Department to Stop Some Corinthian Default Collections

The U.S. government will stop court proceedings to collect on the defaulted student loans of former students of Corinthian Colleges Inc., the bankrupt for-profit college that closed in April.

The Education Department will also put loans in forbearance for about 50,000 former students who attended the company’s Heald College on or after 2010 and who request it, according to a U.S. Bankruptcy Court filing in Wilmington, Delaware.

The Education Department last month said it would extend loan forgiveness to students who attended one of the schools as of June 2014. The department is also making loan discharge easier for students who claim they were misled on matters such as job placement rates or credit transfer.

Students claim they were saddled with debt for worthless degrees. Corinthian, which operated schools under the brands Everest, WyoTech and Heald colleges, says it provided a valuable education.

The chain agreed in July 2014 to sell or close its 107 campuses, in the biggest shutdown in U.S. higher education. In November, it agreed to sell about half its campuses to Education Credit Management Corp., a nonprofit organization specializing in student debt collection.

The case is In re Corinthian Colleges Inc., 15-bk-10952, U.S. Bankruptcy Court, District of Delaware (Wilmington).

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