Education Department cancels $3.9B in debt for ITT Technical students
The Department of Education is canceling all remaining federal student loans to borrowers that attended ITT Technical Institute from 2005 until it closed in 2016, the department said Tuesday.
Why it matters: The announcement follows a series of actions by the Education Department to wipe out loans for borrowers whose schools defrauded them.
- "ITT spun a web of lies to coerce students into enrolling into their programs," U.S. Secretary of Education Miguel Cardona said Tuesday.
- Tuesday's announcement marks the second largest group discharge in the Department of Education history, Cardona added.
Driving the news: The decision will result in 208,000 borrowers receiving $3.9 billion in full loan discharges, per the department.
- The borrowers will have their student loans cleared without any additional action.
- "The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause," Cardona said.
The big picture: The announcement comes after the department investigated internal records, testimony from ITT Tech managers and recruiters and first-hand accounts from borrowers.
- The department also said Tuesday that it notified DeVry University that it is required to pay millions of dollars for approved borrower defense applications.
- The Education Department found that from 2008 to 2015 DeVry University "repeatedly misled prospective students" about graduates' job placement rates.
The other side: "The Department of Education’s announcement was anticipated based on the February news release. We are in receipt of the notice from the Department and are reviewing it," DeVry University said in a statement.
- "We continue to believe the Department mischaracterizes DeVry’s calculation and disclosure of graduate outcomes in certain advertising, and we do not agree with the conclusions they have reached."
Editor's note: This story has been updated with a statement from DeVry University.