Former ITT Tech Students Receive $3.9 Billion In Debt Relief – WPMT FOX 43 | Vette Leader

The latest move adds to the Biden administration’s list of incremental debt relief, but provided no answers for broader student debt relief.

WASHINGTON — Students who used federal loans to attend the ITT Technical Institute back in 2005 will automatically have that debt forgiven after authorities found “widespread and pervasive misrepresentations” at the defunct for-profit college chain, the Biden University announced government on Tuesday.

The action will forgive $3.9 billion in government student debt for 208,000 borrowers, the Department of Education said. The debt is being forgiven using a federal regulation known as the Borrower Defense, which is designed to protect students from colleges that make false advertising claims or otherwise commit fraud.

“The evidence shows that for years ITT executives have deliberately misled students about the quality of their programs in order to benefit from government student loan programs, regardless of the hardship this would cause,” said Secretary of Education Miguel Cardona.

It adds to the administration’s growing list of phased student-debt forgiveness — a similar action in June pledged to wipe out $5.8 billion in debt related to Corinthian colleges — but it provided no answers for broader debt relief for students.

Will Biden give student loans to more people?

President Joe Biden supported debt relief as a presidential candidate and has been considering canceling up to $10,000 per borrower for months. He recently promised a decision by the end of August, but Tuesday’s announcement didn’t shed any new light on his deliberations.

By targeting certain groups of borrowers, the administration says it has now approved nearly $32 billion in student debt for 1.6 million borrowers.

The new policy will automatically forgive any remaining government student debt used to attend ITT Tech from January 1, 2005 until its closure in 2016.

At its peak, ITT was one of the nation’s largest for-profit college chains, with 130 campuses in 38 states. The company was shut down abruptly after facing severe sanctions from the Department of Education, amid allegations that the company had pressured students into risky loans and misled them about the quality of academic programs.

The Department of Education previously approved the forgiveness of $1.9 billion in debt held by former ITT Tech students, mostly for students who had applied for relief and claimed they had been misled by the company be. The new policy does not require borrowers to apply for relief.

Federal officials based the decision on findings from many attorney generals, as well as the Consumer Financial Protection Bureau and the nonprofit Veterans Education Success.

Investigators found widespread evidence that ITT Tech was making 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 accreditation of the chain’s nursing program.

“ITT defrauded hundreds of thousands of students,” said Richard Cordray, chief of Federal Student Aid, the federal agency that oversees student loans unfairly taking on student debt borne by a dishonest institution.”

The decision was applauded by groups representing students.

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

Tasha Berkhalter enrolled at ITT Tech in 2006 to pursue a career in criminal justice after being honorably discharged from the Army. Recruiters promised that after graduation she would easily find a job. But after she got her bachelor’s degree, no one would hire her.

“That was all for a degree nobody takes seriously. Whenever I told employers where I went to college, they showed me the door,” said Berkhalter of Lima, Ohio.

Berkhalter had previously paid off much of her nearly $100,000 debt through the borrower defense rule and said she expects more to be canceled soon.

“The cloud over my head has been removed,” 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 initiated proceedings to recover $24 million from DeVry University to offset federally-approved loan foreclosures for 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 lied about the success of its graduates to get new students to enroll. It was the first time the agency had approved such demands for an institution that is still in operation.

DeVry will now be given an opportunity to present arguments as to why it should not be held liable and may request a hearing to appeal the decision.

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