The U.S. Department of Education (Department) announced that it will discharge all remaining federal student loans that borrowers received to attend ITT Technical Institute (ITT) from January 1, 2005, through its closure in September 2016. The decision, which follows Departmental findings based on extensive internal records, testimony from ITT managers and recruiters, and first-hand accounts from borrowers, will result in 208,000 borrowers receiving $3.9 billion in full loan discharges. This includes borrowers who have not yet applied for a borrower defense to repayment discharge. These borrowers will have the federal student loans they received to attend ITT discharged without any additional action on their part.
“It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises,” said U.S. Secretary of Education Miguel Cardona. “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. 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.”
The Department also announced that it formally notified DeVry University (DeVry), that it is required to pay millions of dollars for approved borrower defense applications. DeVry can submit information and arguments for why it should not be required to pay these liabilities or request a hearing before the Department’s Office of Hearings and Appeals.
Finally, the Department announced the approval of discharges for just under 100 borrowers who enrolled in the Medical Assistant or Medical Billing & Coding Program at Kaplan Career Institute’s Kenmore Square location in Massachusetts from July 1, 2011 to February 16, 2012 when the institution stopped enrolling new students. These are borrowers identified by Massachusetts Attorney General Maura Healey after an investigation found that the institution repeatedly lied about its job placement rates to borrowers, among other deceptive practices. The location closed in February 2013.
Today’s action brings the total amount of loan relief approved by the Biden-Harris Administration to nearly $32 billion for 1.6 million borrowers. This includes $13 billion related to institutions that took advantage of borrowers. It represents the Department’s continued commitment to providing debt relief to eligible borrowers.
About the Department’s ITT findings
Today’s ITT announcement builds on the Administration’s previous actions related to ITT , which has resulted in the approval of $1.9 billion in discharges for 130,000 students to date. This includes borrower defense findings that ITT engaged in widespread and pervasive misrepresentations related to the ability of students to get a job or transfer credits, and lying about the programmatic accreditation of ITT’s associate degree in nursing. Separately, the Department announced an expanded window for borrowers who attended but did not graduate from ITT to receive closed school discharges.
“ITT defrauded hundreds of thousands of students, as we identified when I was the director of the Consumer Financial Protection Bureau,” said Federal Student Aid Chief Richard Cordray. “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.”
The Department’s findings around ITT were assisted by significant and extensive work by attorneys general across the country, the Consumer Financial Protection Bureau, and Veterans Education Success. The Department received important evidence from half the country’s state offices of attorneys general, led by Colorado and Oregon Attorneys General and supported by significant evidence from the Iowa and New Mexico Attorneys General.