Categories: Tech News

Biden administration cancels $3.9 billion in ITT Tech student debt

WASHINGTON — The Biden administration announced Tuesday that it will write off remaining federal student loan debt for borrowers who attended ITT Technical Institute after finding that the for-profit college misled students.

The move will automatically cancel $3.9 billion in loans for 208,000 students who attended ITT since 2005, the Education Department said in a statement.

“It’s time for student borrowers to stop shouldering the burden of ITT’s years of lies and false promises,” said Education Secretary Miguel Cardona. “The evidence shows that for years, ITT leaders intentionally misled students about the quality of their programs in order to benefit from federal student loan programs, without considering the hardship this would cause.”

The Education Department said the Biden administration has now written off $32 billion in student loans “whose institutions were taken advantage of,” as well as public service workers and students with disability

ITT, which used to be one of the nation’s largest operators of for-profit technical schools, closed in 2016 after the Department of Education barred it from enrolling new students using federal financial aid.

The remaining debt is being written off through a program called borrower defense, which allows student debt to be wiped out if a school misrepresents or lies about their educational credentials.

Through interviews with ITT managers, recruiters and borrowers, as well as reviews of internal records, recruitment materials and brochures, the Education Department determined that ITT “engaged in widespread and pervasive misrepresentations,” it said.

Among the misrepresentations, the Education Department said: ITT misled students about their ability to get jobs or transfer credits, and lied about the accreditation of its nursing program.

“ITT defrauded hundreds of thousands of students,” said Richard Cordray, the Education Department’s chief operating officer for federal student aid. “By providing the loan relief students deserve, we’re giving them the opportunity to resume their educational journey without the unfair burden of student debt they carry from a rogue institution.”

The Biden administration has stepped up executive action to protect students defrauded by for-profit colleges. In June, it wrote off $5.8 billion for 560,000 borrowers attending schools affiliated with Corinthian Colleges.

The Department of Education said Tuesday it also notified for-profit DeVry University this week that it owed the government $24 million to cover the cost of canceling student loans that attended.

Debt cancellation advocates have pressed President Joe Biden to take steps to address student debt more broadly for the more than 40 million borrowers in the U.S.

Biden has said he will decide whether to pursue mass cancellation by the end of August, when the last payment break on federal student loans expires. He has previously indicated he would be open to writing off $10,000 per borrower; progressives have been pushing for $50,000.


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