The U.S. Department of Education (Department) announced today the approval of 18,000 borrower defense to repayment (borrower defense) claims for individuals who attended ITT Technical Institute (ITT). These borrowers will receive 100 percent loan discharges, resulting in approximately $500 million in relief. This brings total loan cancellation under borrower defense by the Biden-Harris Administration to $1.5 billion for approximately 90,000 borrowers.
“Our action today will give thousands of borrowers a fresh start and the relief they deserve after ITT repeatedly lied to them,” said Education Secretary Miguel Cardona. “Today’s action is part of the Biden-Harris Administration’s continued commitment to stand up for borrowers when their institutions take advantage of them. 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. This work also emphasizes the need for ongoing accountability so that institutions will never be able to commit this kind of widespread deception again.”
These approvals cover two categories of claims submitted by borrowers who attended ITT: their likely employment prospects and the ability to transfer credits. This is the first approval of a new category of borrower defense claims by the Department since January 2017.
On employment prospects, the Department is expanding findings that it had previously made just for students who attended ITT in California to cover borrowers regardless of where they attended. ED’s review of the evidence found that ITT made repeated and significant misrepresentations to students related to how much they could expect to earn and the jobs they could obtain after graduation between 2005 and the institution’s closure in 2016. In reality, borrowers repeatedly stated that including ITT attendance on resumes made it harder for them to find employment, and their job prospects were not improved by attending ITT.
Similarly, the Department found that ITT misled students about the ability to transfer their credits to other institutions from January 2007 through October 2014. The Department found that credits rarely transferred and borrowers made little to no progress along their educational journey, yet were saddled with student loan debt as a result of their time at ITT.
These findings were made possible thanks to evidence provided by partners at the Consumer Financial Protection Bureau and the Iowa Office of the Attorney General, as well as Veterans Education Success. The Department looks forward to continuing to work with these organizations and others whenever schools engage in conduct that harms borrowers.
The Department will begin notifying borrowers of their approvals in the coming weeks and will then work expeditiously to discharge the approximately $500 million loan balances for these borrowers.
Today’s action continues efforts by the Department to provide targeted loan relief to student borrowers and ensure borrower defense and other relief programs are delivering promised assistance to borrowers. In March, the agency took action to grant $1 billion in relief to 72,000 borrowers with previously approved borrower defense claims. The Department also suspended requests for earnings documentation from borrowers who had received a total and permanent disability discharge. This action reinstated discharges for 41,000 borrowers and will help protect another 190,000 borrowers from the risk of losing their discharges. Additionally, the Department announced plans to conduct rulemaking on borrower defense, total and permanent disability discharges, and other items, starting with public hearings on June 21, 23, and 24.
For more information about borrower defense, visit StudentAid.gov/borrower-defense. For more information on the upcoming public hearings, click here.
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