On Tuesday, August 16, the United States Department of Education released a press release stating its intention to repay all government student loans received by borrowers who attended the ITT Technical Institute from January 1, 2005 until its closure.
As of September 2016, a total of $3.9 billion in loan payments from 208,000 borrowers. This is the second-largest debt relief measure taken by the Biden-Harris administration against scammed borrowers, following the cancellation of the $5.8 billion loan to 560,000 Corinthian Colleges alumni.
Qualified borrowers, including those who have not applied, a borrower advocating repayment relief will have their debt forgiven without any further action on their part.
The Department of Education ‘s decision followed conclusions based on ITT’s internal records and policies; testimonials from alumni, employees and administrators; ITT recruitment materials and brochures; records of ITT representatives interacting with prospective students; Investigative files and submissions collected by congressional investigators and attorneys general; and individual borrower defense motions submitted by ITT alumni.
Federal ITT Exam History
This isn’t the first time the Biden-Harris administration has cracked down on ITT, which previously resulted in the approval of $1.9 billion in layoffs for 130,000 students.
ITT is already under scrutiny based on borrower defense findings that the for-profit institution misrepresented its students’ ability to get a job or transfer credits to other schools and lied about ITT’s programmatic accreditation for associate degrees in nursing.
The Consumer Financial Protection Bureau (CFPB) also worked to protect ITT’s borrowers, resulting in the cancellation of $498 million in private student loans. The CFPB sued ITT in 2014, alleging that it pressured students to take out expensive personal loans even though they knew most would default.
Five years later, the CFPB obtained a ruling prohibiting ITT from offering or granting student loans. The CFPB also obtained judgments against other parties that helped ITT violate the Consumer Financial Protection Act by owning and administering the university’s private student loans.
In addition to the CFPB, the Department of Education received key evidence from half of the states’ attorneys general, led by the attorneys general of Colorado and Oregon and supported by evidence from the attorneys general of Iowa and New Mexico. Their findings were also supported by the significant and extensive work of Veterans Education Success.
Other institutions targeted by the Ministry of Education
Along with ITT, the Department of Education has also officially notified DeVry University that it is responsible for nearly $24 million in approved borrower defense claims. The Department of Education found that from 2008 to 2015, DeVry reported that 90% of its actively seeking job-seeking graduates found a job in their field of study within six months of graduation, although their actual placement rate was about 58%.
The Department of Education expects the number of approved waivers to increase as it continues to judge additional applications from DeVry alumni.
In addition, waivers for approximately 100 Kaplan Career Institute participants were also approved. The Massachusetts Attorney General presented evidence to the Department of Education that Kaplan reported a job placement rate of more than 70%, when the actual number was only 25%. The Massachusetts Attorney General also found that Kaplan failed to provide borrowers with promised career services.