Defrauded Student Borrowers: U.S Education Department Approves More Loan Forgiveness

The Education Department hss approved 18,000 claims for federal student loan forgiveness, totaling roughly $500 million in relief for students who attended the now defunct for-profit ITT Technical Institute.

The new batch of relief for borrowers, who filed years ago for loan forgiveness through what is known as borrower defense, is the latest effort by the government to help individuals who enrolled in for-profit colleges that made false claims about the value of their certificates and degrees.

The efforts represent an about-face from the Trump administration, which sought to limit the number of borrowers who qualified for loan forgiveness through borrower defense, as well as limit the amount of relief those who did qualify received.

The announcement brings total loan cancellation through the borrower defense process by the Biden administration to $1.5 billion for approximately 90,000 borrowers.

Education Secretary Miguel Cardona said in a statement that the action will give thousands of borrowers a fresh start and the relief they deserve after ITT repeatedly lied to them.

He added that many of these borrowers have waited a long time for relief, and the government needs to work swiftly to render decisions for those whose claims are still pending.

The announcement provides relief for two groups of borrowers – one based on false claims related to employment prospects and the second on false claims related to the ability to transfer credits.

Education Department documents show that ITT Tech made “repeated and significant misrepresentations” to students related to how much they could expect to earn and the jobs they could obtain after graduation between 2005 and the institution’s closure in 2016.

Department documents also show that ITT misled students about the ability to transfer their credits to other institutions from January 2007 through October 2014, finding that the credits rarely transferred and that borrowers made little to no progress along their educational journey, yet were saddled with student loan debt as a result of their time at ITT.

The Education Department underscored that their ability to provide the relief is in large part due to evidence provided by the Consumer Financial Protection Bureau, the Iowa Office of the Attorney General and Veterans Education Success, all of which have been advocating on behalf of former ITT Tech students for the better part of a decade.