Feds Wipe Nearly $4 Billion In Debt For ITT Students
The Education Department announced they are wiping nearly $4 billion in student loan debt for students who attended ITT Tech.
While the majority of student loan borrowers eagerly wait to hear Biden’s decision on whether or not to cancel student loan debt for the public, the feds have already been busy at work wiping that slate clean for certain groups. In June, the Biden administration canceled almost $6 billion worth of loan debt for students who had attended Corinthian colleges. Now, they have handed out forgiveness to some students who attended ITT Tech institutes, wiping nearly $4 billion in debt altogether.
On August 16th, the Biden administration made the announcement that they would automatically cancel student loan debt accrued by students that attended ITT Tech as far back as 2005. This was in direct response to a finding that the private, for-profit school was guilty of “widespread and pervasive misrepresentations.” The $3.9 billion price tag of this act will affect roughly 208,000 borrowers.
At one point in time, ITT Tech was considered one of the most prominent higher ed schools to attend. The company offered 130 campuses spanning 38 states all across the nation. Part of their widespread recognition was due to the massive effort the for-profit institute placed on advertisements. As quirky as they were coined, they have not gone forgotten by 90’s kids who grew up catching them on commercial spots over and over.
Despite the appeal to many, ITT Tech closed its doors for good in 2016, in an abrupt manner. It is now known that this was in response to extensive sanctions they were facing. The Education Department did this following allegations that the college was persuading students to take on massive debt while also deceiving them in regards to the quality of its academic offerings.
When announcing the mass debt cancellation for ITT Tech students, Education Secretary Miguel Cardona addressed this misleading practice. He noted that it has caused hundreds of thousands of young Americans to struggle with finances and take on undue hardships. Altogether, the costs to attend one of these schools the year before they shuttered their doors could run a bill of up to more than $30,000 a year for a student.
This isn’t the first time the Department of Education has enacted sweeping debt cancellation for borrowers because of a for-profit college’s wrongdoings. In June, the government canceled $5.8 billion in debt for Corinthian college attending students. Also defunct like ITT Tech, this similar company mislead young Americans into burdening debt for their profit. The federal rule that the Biden administration has enacted these measures under is known as borrower defense, which protects students from any college that may be found to have committed fraud.
There is nothing student loan borrowers will have to do in order to access this student loan debt cancellation. The act will automatically be laid out, and it appears to encompass all students that took on federal loans to pay for the institute between 2006 and the school’s closure. Now that this act is under Biden’s belt, the expectancy is that he will soon announce widespread federal student loan cancellation for all borrowers before the end of August.
