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Students who used federal loans to attend ITT Technical Institute as far back as 2005 will automatically get that debt canceled after authorities found « widespread and pervasive misrepresentations » at the defunct for-profit college chain, the Biden administration announced Tuesday.
The action will cancel $3.9 billion in federal student debt for 208,000 borrowers, the Education Department said. The debt is being forgiven using a federal rule known as borrower defense, which is meant to protect students from colleges that make false advertising claims or otherwise commit fraud.
« 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, » Education Secretary Miguel Cardona said.
It adds to the administration’s growing list of piecemeal student debt cancellations — a similar action in June promised to erase $5.8 billion in debt related to Corinthian Colleges — but it provided no answers on broader student debt cancellation.
President Joe Biden supported debt cancellation as a presidential candidate and for months has been considering erasing up to $10,000 per borrower. He recently promised a decision by the end of August, but Tuesday’s announcement cast no new light on his thinking.
Through targeted cancellation for specific 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 cancel any remaining federal student debt that was used to attend ITT Tech from Jan. 1, 2005, through its closure in 2016.
At its height, ITT was among the largest for-profit college chains in the nation, with 130 campuses across 38 states.
