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Administrative Discharge of Corinthean College Student Loans

On April 27, 2015, a for profit college, Corinthian Colleges, Inc., filed bankruptcy after closing its remaining 30 locations across the United States.  Prior to closing its remaining locations, the U.S. Department of Education found that Corinthian had systematically deceived students with false graduation and job placement rates.

What happens to students who incurred student loans to attend this now defunct for profit school?  The U.S. Department of Education has a remedy available to students who have taken out federal student loans to attend a school and then the school closes.  A student can apply for an administrative discharge of the student loan debt if the school closes its doors within 120 days of the student attending.  An administrative discharge simply means that the borrower does not owe the money.

Other Administrative Discharges

A borrower may also be eligible for an administrative discharge if the borrower has a total and permanent disability or there was a false certification, which means the student was enrolled in the school without ever receiving a high school diploma or GED, fraud occurred by the school in enrolling the student, the student’s identity was stolen or the student was unable to meet the state minimum job requirements.

Luckily, the United States Department of Education has given former Corinthian students a lifeline.  In the case of Corinthian Colleges, this option has been extended to any student who withdrew from the college after June 20th, 2014, as long as the student did not already transfer their earned credits to another school.

An administrative discharge is not automatic or guaranteed.  The borrower must apply for the administrative discharge.

Kelley & Fulton Can Help

If you need assistance with your student loan debt, Kelley & Fulton is here to help. We invite you to set up a consultation by phone at (561) 419-9037, with one of our knowledgeable attorneys, where you can begin to learn more about your situation and the necessary steps to help you move forward. If you have any questions regarding student loans and your individual circumstances, feel free to give the experienced foreclosure attorneys at Kelley & Fulton a call today.