$3.9 billion loan of ITT Tech alumni canceled: NPR

An ITT Technical Institute campus in Rancho Cordova, Calif., is seen on September 6, 2016. Students who used federal loans to participate in ITT Tech until 2005 would automatically cancel that loan.

Rich Pedroncelli / AP

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Rich Pedroncelli / AP

An ITT Technical Institute campus in Rancho Cordova, Calif., is seen on September 6, 2016. Students who used federal loans to participate in ITT Tech until 2005 would automatically cancel that loan.

Rich Pedroncelli / AP

Washington — Students who used federal loans to participate ITT Technical Institute The Biden administration announced Tuesday that it would automatically cancel that loan as far back as 2005, when executives were accused of “widespread and widespread misrepresentation” in the for-profit college chain. Statement”.

Action will cancel $3.9 billion in federal student loans for 208,000 borrowers, Department of Education Told, The loan is being forgiven using a federal rule known as borrower defenseWhich is to protect students from colleges that make false advertising claims or otherwise commit fraud.

“The evidence shows that for years, ITT leaders deliberately misled students about the quality of their programs in order to take advantage of federal student loan programs,” said Education Secretary Miguel Cardona.

It adds to the administration’s growing list of piecemeal student loan cancellations — a similar action it promised in June to eradicate. $5.8 billion in debt related to Corinthian colleges — but it did not respond to extensive student loan cancellations.

President Joe Biden as Presidential Candidate for More Months Backed by Debt Canceling Considering eliminating up to $10,000 per borrower, He recently promised a decision by the end of August, but Tuesday’s announcement didn’t shed any new light on his thinking.

Through targeted cancellations for specific groups of borrowers, the administration says it has now approved nearly $32 billion in student loans for 1.6 million borrowers.

The new policy will automatically cancel any remaining federal student loans that were used to participate in ITT Tech from January 1, 2005, through its closure in 2016.

At its peak, ITT was one of the largest for-profit college chains in the country with 130 campuses in 38 states. company abruptly stop It faced heavy sanctions from the Department of Education amid allegations that the company pushed students into risky loans and misled them about the quality of educational programs.

The Department of Education has previously approved the cancellation of $1.9 billion in debt held by ITT Tech alumni, mainly for students who applied for relief, saying they were misled by the company. went. In the new policy, borrowers will not need to apply for relief.

Federal officials based the decision on the findings of several state attorneys general with the Consumer Financial Protection Bureau and the nonprofit Veterans Education Success.

Investigators found extensive evidence that ITT Tech made false claims about its students’ ability to find jobs after graduation, the agency said. They also found that the chain misled students about their ability to transfer credits to other schools and the recognition of the chain’s nursing program.

“ITT defrauded hundreds of thousands of students,” said Richard Cordrey, the chief of federal student aid, the federal office that oversees student loans. “By providing debt relief to students, we are giving them an opportunity to resume their educational journey without the undue burden of student loans from an unscrupulous institution.”

The decision drew applause from the groups representing the students.

“This is a life-changing announcement for the thousands of people who just wanted to make their lives better and help them trust the wrong people,” said Libby Webster, senior counsel for the nonprofit Student Defense.

Tasha Barkhalter enrolled at ITT Tech in 2006 to pursue a career in criminal justice after being honorably discharged from the military. The recruiters promised that he would get a job easily after graduation. But after he is a bachelor, no one will hire him.

“It was all for a degree that no one takes seriously,” said Berkhalter, of Lima, Ohio. Whenever I told employers I went to college, I was shown the door.

Berchhalter previously wiped out about $100,000 in debt through the debtor defense rule, and said she expected more cancellations soon.

“The cloud has been lifted from my head,” she said. “I know there are hundreds of thousands of alumni like me who are finally getting the relief they deserve.”

In a separate action, the Department of Education began the process of recovering $24 million from DeVry University for federal government-approved loan cancellations due to alleged fraud.

In February, the Biden administration approved $70 million in relief for 1,800 former DeVry students after the Department of Education concluded that the school had lied about the success of its graduates in enrolling new students. It was the first time the agency approved such claims for an entity that is still in operation.

DeVry will now have a chance to explain why he should not be held liable. Spokesperson Hessie Fernandez said DeVry officials are reviewing the department’s notice. He insisted that the school had changed ownership and leadership since the time of the allegations.

“We believe that the department misrepresents Devery’s calculation and disclosure of graduation results in certain advertisements, and we do not agree with their findings,” Fernandez said.

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