WASHINGTON — The Biden administration announced Tuesday it will cancel the remaining federal student loan debt for borrowers who attended ITT Technical Institute after finding that the for-profit college misled students
The move will automatically cancel $3.9 billion in loans for 208,000 students who attended ITT dating back to 2005, the Education Department said in a statement.
“It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises,” said 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 Education Department said the Biden administration has now canceled $32 billion in loans for students “whose institutions took advantage of them,” as well as for public service workers and disabled students.
ITT, which used to be one of the country’s largest operators of for-profit technical schools, shut down in 2016 after the Education Department banned it from enrolling new students who use federal financial aid
The remaining debt is being canceled through a program called borrower defense, which allows for student debt to be erased if the school misrepresents or lies about the educational degrees it offers.
Through interviews with ITT managers, recruiters and borrowers, as well as reviews of internal records, recruitment materials and brochures, the Education Department determined that ITT “engaged in widespread and pervasive misrepresentations.”
Among those misrepresentations, the Education Department said ITT misled students about their ability to get a job or transfer credits, and lied about the accreditation of its nursing program.
“ITT defrauded hundreds of thousands of students,” 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 Biden administration has stepped up executive action to protect students defrauded by for-profit colleges. In June, it canceled $5.8 billion for 560,000 borrowers who attended schools affiliated with Corinthian Colleges.
The Education Department on Tuesday said it also notified the for-profit institution DeVry University this week that it owed the government $24 million to cover the cost of canceling the loans of students who went there.
But debt cancelation advocates have pressured President Joe Biden to take steps to address student debt more broadly for the more than 40 million borrowers in the U.S.
Biden has said that he would decide whether to pursue mass cancelation by the end of August, when the latest payment pause for federal student loans is set to expire.