Loan forgiveness offered to more former ITT Tech students

Aug 26, 2021, 8:46 AM | Updated: 9:19 am

The Education Department announced Thursday it will forgive student debt for more than 100,000 borrowers who attended colleges in the now-defunct ITT Technical Institute chain but left before graduating.

In a rarely used move, the agency said it will erase federal loans for borrowers who left the for-profit colleges during an eight-year window before their 2016 closure. During that period, the department said, ITT Tech lied about its financial health and misled students into taking on debt they couldn’t repay.

The action will offer $1.1 billion in loan forgiveness to 115,000 borrowers who attended ITT Tech, which had more than 130 campuses across 38 states. About 43% of those borrowers are in default on their student loans, the department said.

“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,” Education Secretary Miguel Cardona said in a statement.

Students are usually eligible for loan forgiveness if they attended a college within 120 days of its closure and were unable to complete their degrees. But for ITT Tech, the Education Department is extending the window back to March 31, 2008.

That date, the agency said, is when ITT Tech’s executives disclosed a scheme to hide the truth about the company’s finances after the loss of outside funding. It led ITT Tech to shift more costs to students, the department said, and it prevented the company from making investments to provide a quality education.

ITT Tech shut down in 2016 after being hit with a series of sanctions by the Obama administration.

Under the new action, eligible borrowers will automatically get their loans cleared if they did not attend another college within three years of the school’s closure. Those who went to another college but did not earn degrees may be eligible but must apply for discharges, the agency said.

Borrower advocates have been urging the Biden administration to broaden loan relief for students who attended shuttered for-profit colleges. The nonprofit Student Defense applauded the department’s move and said the same should be done for students who attended other for-profit chains.

“There are countless others who attended other predatory institutions who are still waiting. We hope the Department will continue to implement our recommendations to make things right for all of them, too,” Alex Elson, vice president of Student Defense, said in a statement.

It is the latest in a series of loan discharges targeting specific groups of students. In June, the Biden administration erased more than $500 million in student debt for borrowers who were defrauded by ITT Tech. That decision centered on claims that the company made exaggerating its graduates’ success in finding jobs.

Earlier this month, Cardona announced he would automatically forgive student loans for 300,000 Americans with severe disabilities that leave them unable to earn significant incomes.

But the Biden administration also faces growing pressure to pursue wider student debt forgiveness. Some Democrats in Congress are calling for the White House to use executive action to erase $50,000 for all student loan borrowers.

Biden has suggested such action needs to come from Congress, but he has asked the Education and Justice departments to study the topic. Earlier this month, Cardona said that study is still underway.

The Education Department has the authority to extend the window for loan forgiveness in cases of school closures, but the power has not often been used. After the closure of the Corinthian Colleges for-profit chain in 2015, the Obama administration widened the window back to June 20, 2014.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Associated Press

Austria expels 4 Russian diplomats based in Vienna

VIENNA (AP) — Austria’s government said Thursday that it has ordered four diplomats based in Vienna, including two at Moscow’s mission to U.N. agencies in the city, to leave the country. The Foreign Ministry said in a brief statement that two diplomats at the Russian Embassy had “engaged in acts incompatible with their diplomatic status” […]
2 hours ago
FILE - Adani Group Chairman Gautam Adani attends the "Invest Karnataka 2016 - Global Investors Meet...
Associated Press

Adani scraps $2.5B share sale after fraud claims hit stock

NEW DELHI (AP) — Embattled Indian billionaire Gautam Adani said Thursday his conglomerate will review its plans for raising capital after calling off his flagship company’s $2.5 billion share offering following the loss of tens of billions of dollars in market value due to claims of fraud by a U.S.-based short-selling firm. Adani Enterprises canceled […]
2 hours ago
FILE - A Cathay Pacific airplane taxis at Hong Kong International Airport in Hong Kong on Nov. 25, ...
Associated Press

Hong Kong woos tourists with air tickets and vouchers

Hong Kong (AP) — Hong Kong will give away air tickets and vouchers to woo tourists back to the international financial hub, racing to catch up with other popular travel destinations in a fierce regional competition. During the pandemic, the city largely aligned itself with mainland China’s “zero-COVID” strategy and has relaxed its entry rules […]
2 hours ago
FILE - A man walks in front of the Bank of England, at the financial district in London, on Nov. 3,...
Associated Press

Bank of England poised for big rate hike to tame inflation

LONDON (AP) — The Bank of England is expected to raise interest rates by as much as half a percentage point Thursday as it seeks to tame the double-digit inflation fueling a cost-of-living crisis, public-sector strikes and fears of recession. The move would push the U.K.’s key rate to 4%. Economists suggest this may be […]
2 hours ago
FILE - New British Prime Minister Rishi Sunak waves after arriving at Downing Street in London, Tue...
Associated Press

Sunak marks 100 days as UK prime minister as problems mount

London (AP) — U.K. Prime Minister Rishi Sunak has angry unions to the left of him, anxious Conservative Party lawmakers to the right and, in the middle, millions of voters he must win over to avert electoral defeat. It’s a daunting situation for Sunak, who on Thursday marks 100 days in office, more than twice […]
2 hours ago
File - Security forces stand guard during a demonstration in front of the Iraqi central bank as cur...
Associated Press

Targeting Iran, US tightens Iraq’s dollar flow, causing pain

BAGHDAD (AP) — For months, the United States has restricted Iraq’s access to its own dollars, trying to stamp out what Iraqi officials describe as rampant money laundering that benefits Iran and Syria. Iraq is now feeling the crunch, with a drop in the value of its currency and public anger blowing back against the […]
1 day ago

Sponsored Articles

(Pexels Photo)...

Sports gambling can be fun for adults, but it’s a dangerous game for children

While adults may find that sports gambling is a way to enhance the experience with more than just fandom on the line, it can be a dangerous proposition if children get involved in the activity.
...
Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
(Desert Institute for Spine Care photo)...
DESERT INSTITUTE FOR SPINE CARE

Why DISC is world renowned for back and neck pain treatments

Fifty percent of Americans and 90% of people at least 50 years old have some level of degenerative disc disease.
Loan forgiveness offered to more former ITT Tech students