The Department of Education on Thursday announced that it would cancel $1.1 billion in student debt for more than 100,000 borrowers who attended ITT Technical Institute, the now-defunct for-profit school.
Based on a review of the school’s closure, the department "will make $1.1 billion in closed school discharges available to an additional 115,000 borrowers," an estimated 43% of whom are in default, who did not finish their degree or get their credentials, and left the school on or after March 31, 2008.
According to the department’s press release, "March 31, 2008 is when the company's executives publicly disclosed the start of a financial scheme that kicked off a series of misrepresentations to hide the true nature of the school's finances following a public loss of outside financing, which led to shifting additional costs to students and hindered its ability to invest in delivering quality education to students."
"For years, ITT hid its true financial state from borrowers while luring many of them into taking out private loans with misleading and unaffordable terms that may have caused borrowers to leave school," U.S. Secretary of Education Miguel Cardona said in a statement.
"Today's action continues the Department's efforts to improve and use its targeted loan relief authorities to deliver meaningful help to student borrowers. At the same time, the continued cost of addressing the wrongdoing of ITT and other predatory institutions yet again highlights the need for stronger and faster accountability throughout the federal financial aid system."
The department notes that under President Joe Biden, it has cancelled the student debt of more than 560,000 borrowers for a total of $9.5 billion.
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