Help is on the way for more than 2,000 Massachusetts residents who piled up student loans to attend Corinthian Colleges Inc., a for-profit school that went into bankruptcy last year after running afoul of state and federal regulators.
The US Department of Education on Friday unveiled a program that may forgive about $20 million for students who took courses through the company’s Everest Institute campuses in Brighton and Chelsea. The debt relief is part of a nationwide plan that has already discharged more than $130 million of loans for 8,800 former Corinthian students.
Corinthian was among the largest for-profit school chains before it went bust. Regulators have alleged that the school charged high tuition, misled students about their job prospects after graduation, and encouraged them to lie to get more federal student loan aid.
The US Department of Education has alleged instances of fraud against 100 former Corinthian campuses and fined the company $30 million last year for false claims about job placement rates. Earlier this week, a San Francisco judged ruled that the school had to pay $1.1 billion in student restitution and penalties for unfair and unlawful practices in a case brought by California’s attorney general.
Corinthian was “more worried about profits than about students’ lives,” said Education Secretary John B. King Jr., who came to Massachusetts to announce the expanded program, which makes it easier for students in 20 states to apply for debt relief based on the findings of fraud by regulators.
Massachusetts’ attorney general is one of several across the country that have filed complaints against Corinthian.
Attorney General Maura Healey alleged that Corinthian, through its Everest Institute campuses in Chelsea and Brighton, lured thousands of students to its schools by promising them good-paying careers and through other deceptive marketing tactics and high-pressure sales practices. Many of the students were instead poorly trained, offered little help to find jobs, and left with a mountain of student loan debt.
The job-placement help that Corinthian offered students was recommendations to look at the job search engine Monster.com, Healey said.
Shalaan Williams, a Dorchester mother who attended a Corinthian school for a medical assistance program, said after taking out a $21,000 loan she received very little support from the school in finding a job, despite promises that it would.
“This is a blessing,” Williams said of the loan forgiveness.
The federal agency has set up a website where former students who attended either Corinthian’s Everest Institute or WyoTech can apply for debt relief.
Healey said she expects the action to warn off other questionable for-profit schools from taking advantage of students.
“The discharge of these loans will provide meaningful relief to these students,” she said.