Biden administration erases $500 million in debt owed by defrauded ITT Tech students

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The Department of Education decided that the now-defunct institution misled students

The Biden administration has announced that it’s erasing $500 million in student loan debt for 18,000 former ITT Tech students. 

ITT Tech was shut down in 2017 after the government revoked its federal funding and decided that the for-profit institution had cheated students out of money. The Department of Education said Wednesday that the school misled students about how much they could expect to earn after graduating, as well as how their credits would transfer to other schools.

Education Secretary Miguel Cardona said the action comes with a promise that the Department will continue to stand up for students who were misled by their schools. 

"Our action today will give thousands of borrowers a fresh start and the relief they deserve," Cardona said in a statement. "Many of these borrowers have waited a long time for relief, and we need to work swiftly to render decisions for those whose claims are still pending."

Entitled to relief

In March, the Department of Education announced that it would cancel $1 billion in student loan debt for about 73,000 defrauded students of Corinthian Colleges and ITT Technical Institute. 

An official said a review of Betsy DeVos’s guidelines dealing with student loan relief did not grant an “appropriate level of relief to borrowers” and added that there was “clear evidence” that they had been taken advantage of.

“It has been more than four years since the Department of Education first concluded that these students had been cheated by their institutions and were deserving of full debt relief,” Education Department Chairman Robert C. “Bobby” Scott (D-VA) said. “Unfortunately, instead of simply processing loan forgiveness claims, the previous administration refused to accept the findings of its own staff and suspended action on behalf of these defrauded borrowers.”

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