Education Secretary Miguel Cardona on Wednesday announced the Biden administration will provide $500 million to fully cancel loans for 18,000 former ITT Technical Institute students. File Photo by Bonnie Cash/UPI |
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June 16 (UPI) -- The Department of Education announced Wednesday that it will fully cancel student loans for 18,000 former ITT Technical Institute students who were defrauded by the for-profit college.
Education Secretary Miguel Cardona announced the department will provide $500 million in debt relief to ITT students in its first action based on the grounds that the defunct institution misled students about their ability to transfer credits to other schools and their professional prospects after graduation.
"Our action today will give thousands of borrowers a fresh start and the relief they deserve after ITT repeatedly lied to them," Cardona said. "Many of these borrowers have waited a long time for relief and we need to work swiftly to render decisions for those whose claims are still pending."
Since ITT Tech shut down in 2016, 34,000 former students have petitioned the Education Department to cancel their debt under the borrower defense to repayment statute, after state and federal authorities found the school misled students about the ability to transfer their credits and their job prospects.
Under former President Barack Obama, the agency created a plan to grant ITT Tech students in California relief based on the principle that it violated state law, however former Education Secretary Betsy DeVos refused to approve or deny applications for debt relief under former President Donald Trump's administration.
In March, the Biden administration rolled back a Trump-era policy that provided students defrauded by for-profit institutions only partial relief, instead implementing a more "streamlined approach" which it estimated will eliminate about $1 billion in student loan debt from about 72,000 students.
Cardona said the eligible borrowers will be notified in the coming weeks and that the loan cancellations are part of a commitment by the Biden administration to "stand up for borrowers when their institutions take advantage of them."
"Many of these borrowers have waited a long time for relief and we need to work swiftly to render decisions for those whose claims are still pending," he said. "This work also emphasizes the need for ongoing accountability so that institutions will never be able to commit this kind of widespread deception again."
