Earlier this week, the U.S. Department of Education (DOE) announced that it will be forgiving nearly $4 billion in student loan debt for students who had previously attended ITT Tech. Loan forgiveness is available to over 208,000 students who attended the for-profit university from January 2005, through September 2016.
“It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises,” said Miguel Cardona, the U.S. Secretary of Education. “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.
While some former students may have already completed Borrower Defense Claims against ITT Tech to have their student debt forgiven, the DOE says this won’t be necessary to receive payment moving forward. No further action is required, and all eligible students will have their loans erased.
Students have been defrauded for years
This isn’t the first time the DOE has issued a loan forgiveness statement to former ITT Tech students. After the institution closed its doors in 2016 due to being cut off from federal funding, those who had attended the school but never received a degree had their debt erased.
A lengthy investigation into the school revealed that students had been lied to about how their money was used, how much money they’d make after graduating, and how many of their credits would transfer to other schools.
“ITT defrauded hundreds of thousands of students, as we identified when I was the director of the Consumer Financial Protection Bureau,” said Richard Cordray, the Federal Student Aid Chief at the time. “By delivering the loan relief students deserve, we are giving them the opportunity to resume their educational journey without the unfair burden of student debt they are carrying from a dishonest institution.”
According to Cardona, the goal moving forward is to make students feel safe and secure when applying to schools and borrowing money.
“The Biden-Harris Administration will continue to stand up for borrowers who’ve been cheated by their colleges, while working to strengthen oversight and enforcement to protect today’s students from similar deception and abuse,” he said.
Student loan forgiveness deadline approaching
Federal student loans have been on pause since the beginning of the COVID-19 pandemic in March 2020. After more than two years, consumers only have to wait a few more weeks to learn President Biden’s latest decision regarding loan forgiveness.
The President is scheduled to make an announcement about federal loans on August 31, which has experts speculating about another loan pause or substantial loan forgiveness efforts.