WASHINGTON – The Biden administration announced Tuesday that it will write off the remaining federal student loan debt for borrowers who attended ITT Technical Institute after discovering that the for-profit college deceived students.
The move will automatically write off $ 3.9 billion in loans for 208,000 students who attended ITT in 2005, the Education Department said in a statement.
“It is time for student borrowers to stop carrying the burden of ITT’s years of lies and false promises,” said Education Secretary Miguel Cardona. “The evidence shows that for years ITT leaders have intentionally misled students about the quality of their programs in order to profit from federal student loan programs, regardless of the difficulties that this would cause.”
The Department of Education said the Biden administration has now canceled $ 32 billion in student loans “whose institutions have profited from it,” as well as public service workers and students with disabilities.
ITT, which was one of the country’s largest operators of for-profit technical schools, closed in 2016 after the Department of Education banned it from enrolling new students using federal financial aid.
Residual debt is written off through a program called Borrower Defense, which allows student debt to be written off if a school misrepresents or lies about its educational qualifications.
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 “has engaged in widespread and pervasive misrepresentation,” he said.
Among the misrepresentations, the Department of Education said: ITT deceived students about their ability to find work or transfer credits and lied about accrediting its nursing program.
“ITT defrauded hundreds of thousands of students,” said Richard Cordray, chief operating officer of the education department for federal student aid. “By providing the loan relief that students deserve, we give them the opportunity to resume their education without the unfair burden of student debt they are carrying from a dishonest institution.”
The Biden administration has stepped up enforcement action to protect students scammed by for-profit colleges. In June, it canceled $ 5.8 billion for 560,000 borrowers who attended schools affiliated with Corinthian Colleges.
The Department of Education said Tuesday that it also notified the for-profit institution DeVry University this week that it owed the government $ 24 million to cover the cancellation costs of student loans who went there.
Debt cancellation advocates pressured President Joe Biden to take action to address student debt more broadly for the more than 40 million US borrowers
Biden said he would decide whether to pursue the mass cancellation by the end of August, when the last payment break for federal student loans expires. Previously he indicated that he would be willing to write off $ 10,000 per borrower; progressives pushed for $ 50,000.