Dept. of Education to cancel $1.1 billion in debt for ITT Tech students
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The U.S. Department of Education announced on Thursday that it would forgive federal loans for students who attended ITT Technical Institute (ITT Tech) and left after March 2008 without getting a degree.
Why it matters: This announcement is part of an increased effort by the Biden administration to forgive student loan debt, and follows a federal investigation into alleged fraudulent recruitment practices at the for-profit college.
- According to the Education Department, ITT Tech allegedly began a financial scheme in March 2008 to misrepresent the "true nature" of the school's finances.
By the numbers: About 115,000 borrowers will see $1.1 billion in debt wiped out.
- That brings the total debt eliminated since January 2021 to $9.5 billion, affecting more than 563,000 borrowers, per the Education Department.
- About 43% of those now eligible for debt forgiveness had defaulted on their loans, the statement reads.
Flashback: A publicly traded for-profit college, ITT Tech collapsed in 2016 as it was being investigated for "fraudulently luring students with inflated claims about its graduates’ earnings and career prospects," per the New York Times.
What they're saying: "For years, ITT hid its true financial state from borrowers while luring many of them into taking out private loans with misleading and unaffordable terms that may have caused borrowers to leave school," said U.S. Secretary of Education Miguel Cardona in the announcement.
- "Today's action continues the department's efforts to improve and use its targeted loan relief authorities to deliver meaningful help to student borrowers," Cardona added.
The big picture: This is the latest move by the Biden administration to eliminate debt for students who fell prey to for-profit college fraud.
- On Aug. 19, the administration also forgave $5.8 billion for borrowers who have permanent, serious disabilities.
- The administration has said it faces a backlog of more than 200,000 complaints from borrowers.
