$3.9 billion in canceled student loans: DOE

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208,000 students who used federal loans to attend ITT Technical Institute will automatically have their debt forgiven, the Department of Education announced.  (AP Photo/Rich Pedroncelli, File)

208,000 students who used federal loans to attend ITT Technical Institute will automatically have their debt forgiven, the Department of Education announced. (AP Photo/Rich Pedroncelli, File)

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Thousands of borrowers no longer have to repay their student loans, according to federal officials.

The United States Department of Education is repaying all remaining student loans that were taken out to attend ITT Technical Institute, according to an Aug. 16 news release. school closed – will have their loans canceled without any necessary action on their part.

Borrowers who attended ITT but did not graduate will also have an expanded window to have their loans canceled after the school closes, the department said.

The decision comes following an ongoing investigation into the for-profit institute, which found that “ITT has engaged in widespread and pervasive misrepresentations regarding students’ ability to obtain employment or transfer credits, and lied about the programmatic accreditation of ITT’s associate degree in nursing,” the statement read.

Prior to this latest announcement, the department had already approved $1.9 billion in landfills for 130,000 ITT students.

“ITT has defrauded hundreds of thousands of students,” said federal student aid chief Richard Cordray. “By giving students the loan relief they deserve, we are giving them the opportunity to resume their education without the unfair burden of student debt they are carrying from a dishonest institution.

The department also announced that DeVry University was officially notified that it owed millions after lying about its placement rate for prospective students. The school will have 20 days to respond if it chooses to challenge the department’s findings.

An additional group of about 100 borrowers also received waivers for loans used to enroll in the Physician Assistant or Medical Billing and Coding program at the Kaplan Career Institute’s Kenmore Square location in Massachusetts. The school, which closed in February 2013, also inflated its placement rate, the statement said.

A step in the right direction

This is the latest round of student loans canceled by the Department for Education, many of which were aimed at helping former students of fraudulent for-profit colleges. The Biden-Harris administration has now approved nearly $32 billion in loan relief for 1.6 million borrowers, according to the department.

Several industry experts applauded the ministry’s decision.

Consumer Financial Protection Bureau Director Rohit Chopra said he was “extremely pleased” with the department’s latest decision in an Aug. 16 statement.

“We hope that continued monitoring will prevent further abuses like those seen with ITT Tech, where students were subjected to high interest rates and illegal debt collection practices,” Chopra said. “Unfortunately, too many people have told me that going to college was the worst decision they’ve ever made in their life.”

Veterans Education Success appealed the decision “great news” but demanded that Congress restore GI Bill benefits to defrauded veterans.

“These students deserve to have their student loans forgiven after being misled about education at ITT, credit transferability, and employment after graduation,” said Della Justice, Vice President of Legal Affairs at Veterans Education Success. 16 statement.

“But it’s a total shame that veterans who have been scammed out of their GI Bill benefits aren’t getting their GI Bill back.”

However, the department’s latest discharges come amid mounting pressure as the student loan payment break is about to expire.

Since the start of the pandemic, federal student loan repayments have been suspended. However, payments are set to restart on August 31, and President Joe Biden has yet to announce whether he will extend the pause or allow it to expire.

“Targeted student loan forgiveness is a small step in the right direction, but we need a lot more @POTUS to end this crisis once and for all,” said the Student Loan Debt Crisis Center tweeted Tuesday after the ministry’s announcement.

This story was originally published August 16, 2022 1:48 p.m.

Moira Ritter covers real-time news for McClatchy. She graduated from Georgetown University where she studied government, journalism and German. Previously, she reported for CNN Business.

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