(Washington) Students who took out federal loans to attend graduate school ITT Technical Institute beginning in 2005 will automatically have that debt forgiven after authorities uncovered ‘widespread and pervasive misrepresentations’ in the defunct chain of for-profit universities, the Biden administration announced Tuesday.
Posted at 12:31 p.m.
The action will cancel US$3.9 billion in federal student debt for 208,000 borrowers, the Education Department said. The debt is forgiven using a federal rule known as the borrower’s defense, which is intended to protect college and university students who make false advertisements or commit fraud.
“Evidence shows that for years, ITT executives intentionally misled students about the quality of their programs in order to take advantage of federal student loan programs, regardless of the problems that would cause,” the secretary told Education, Miguel Cardona.
The action adds to the growing list under the Biden administration of piecemeal student debt write-offs — a similar action in June promised to erase $5.8 billion in debt tied to the Corinthian Colleges business — but no indication. was given on a broader cancellation of student debt.
President Joe Biden has promoted student debt forgiveness as a presidential candidate and has been considering for months to write off up to $10,000 per borrower. He recently promised a decision by the end of August, but Tuesday’s announcement did not inform his thinking.
Through targeted cancellations for specific groups of borrowers, the administration says it has now approved the retirement of nearly $32 billion in student debt for 1.6 million borrowers.
The new measure will automatically cancel any remaining federal student debt that was used to attend the ITT Tech institution on 1er January 2005 to its closure in 2016.
At its peak, ITT was among the nation’s largest for-profit university chains, with 130 campuses in 38 states. The firm abruptly shut down after facing stiff penalties from the Education Department amid accusations that the company pushed students into risky loans and misled them on the quality of university programs.
The decision was welcomed by groups representing students.
“This is a life-changing announcement for thousands of people who just wanted to make their lives better and who trusted the wrong people to help them do so,” said Libby Webster, senior counsel for the not-for-profit organization Student Defence.