ABC News Today

WASHINGTON (AP) – Students who used federal loans to attend ITT Technical Institute since 2005 will have that debt automatically written off after authorities found “widespread and pervasive misrepresentations” at the defunct for-profit college chain , the Biden administration announced Tuesday.

The action will cancel $3.9 billion in federal student debt for 208,000 borrowers, the Education Department said. The debt is being forgiven through a federal rule known as a borrower defensewhich is intended to protect students from universities that make false advertising statements or commit fraud.

“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 hardships this would cause,” he said. say the Secretary of Education, Miguel Cardona.

A similar action adds to the administration’s growing list of one-time student debt write-offs. in June he promised to wipe out $5.8 billion in debt related to Corinthian Colleges, but gave no answers about the broader cancellation of student debt.

President Joe Biden supported debt cancellation as a presidential candidate and for months has been considering wiping out up to $10,000 per borrower.. He recently promised a decision by the end of August, but Tuesday’s announcement didn’t shed new light on his thinking.

By targeting specific groups of borrowers, the administration says it has now approved nearly $32 billion in student debt for 1.6 million borrowers.

The new policy will automatically cancel any federal student debt that was used to attend ITT Tech from Jan. 1, 2005 through its closing in 2016.

At its peak, ITT was among the nation’s largest for-profit university chains, with 130 campuses in 38 states. The company closed abruptly after facing heavy penalties from the Department of Education amid allegations that the company pushed students into risky loans and misled them about the quality of academic programs.

The Department of Education has previously approved the cancellation of $1.9 billion owed by former ITT Tech students, largely for students who applied for relief saying they were misled by the company The new policy will not require borrowers to apply for relief.

Federal officials based the decision on findings from many state attorneys general, along with the Consumer Financial Protection Bureau and the nonprofit Veterans Education Success.

Investigators found widespread evidence that ITT Tech made false claims about its students’ ability to find jobs after graduation, the agency said. They also found that the chain misled students about their ability to transfer credits to other schools and about the accreditation of the chain’s nursing program.

“ITT defrauded hundreds of thousands of students,” said Richard Cordray, head of Federal Student Aid, the federal office that oversees student loans. “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 decision was applauded by groups representing students.

“This is a life-changing announcement for thousands of people who just wanted to improve their lives and were relying on the wrong people to help them do it,” said Libby Webster, senior adviser to the heartless association of profit Student Defense.

Tasha Berkhalter enrolled at ITT Tech in 2006 to pursue a career in criminal justice after being honorably discharged from the military. The recruiters promised that he would find a job easily after graduation. But after she got her high school diploma, no one would hire her.

“It was all for a degree that no one takes seriously. Whenever I told employers where I went to college, they showed me the door,” said Berkhalter, of Lima, Ohio.

Berkhalter previously wiped out much of his nearly $100,000 in debt through the borrower defense rule, and said he expects it to be written off soon.

“The cloud has been lifted from my head,” he said. “I know there are hundreds of thousands of former students like me who are finally getting the relief they deserve.”

In a separate action, the Department of Education began a process to recover $24 million from DeVry University to offset federally approved loan cancellations due to alleged fraud.

In February, the Biden administration approved $70 million in aid for 1,800 former DeVry students after the Department of Education concluded the school lied about the success of its graduates in order to get new students to enroll. It was the first time the agency approved such claims for an institution that is still in operation.

DeVry will now have the opportunity to present arguments explaining why he should not be held liable and may request a hearing to appeal the decision.