Department of Education approves yet another loan forgiveness for defrauded student borrowers | Education news



On Wednesday, the Department of Education approved 18,000 federal student loan forgiveness applications – totaling nearly $ 500 million in aid – for students who attended the now defunct commercial technical institute ITT.

Wednesday’s announcement results in a total cancellation of loans as part of the Biden administration’s borrower protection process at $ 1.5 billion for an estimated 90,000 borrowers.

Editorial cartoons about education

“Our actions today will give thousands of borrowers a fresh start and the relief they deserve after ITT has lied to them on numerous occasions,” Education Minister Miguel Cardona said in a statement. “Many of these borrowers have been waiting for help for a long time, and we need to act quickly to make decisions for those whose claims are still pending.”

The announcement provides assistance to two groups of borrowers, one based on false claims related to job prospects, and the other based on false claims related to the ability to transfer loans.

Department of Education documents show that ITT Tech has “repeatedly and materially misrepresented” to students about how much they can expect to earn and what jobs they can get after graduation between 2005 and the school’s closure in 2016.

“In fact, borrowers have repeatedly stated that including an ITT visit on their resume makes it difficult for them to find a job, and their job prospects do not improve after visiting ITT,” the documents say.

Department documents also show that ITT misled students about the possibility of transferring their loans to other educational institutions from January 2007 to October 2014, finding that loans were rarely transferred and that “borrowers did not make much progress in their educational process, but were burdened student loan arrears as a result of their tenure at ITT. “

“This work also highlights the need for ongoing accountability so that institutions can never again commit this kind of widespread deception,” Cardona said.

The Department of Education stressed that their ability to provide assistance is largely driven by evidence provided by the Consumer Financial Protection Bureau, the Iowa Attorney General’s Office and Veterans Education Success, who spoke on behalf of the former ITT Tech. students for most of the decade.

“So many veterans have come to us and talked about how ITT Tech tricked them and stole their military bill,” said Carrie Wofford, president of Veterans Education Success, in a statement. “Their courage – and the courage of several key whistleblowers – have enabled us to provide the Department of Education with the evidence it needs to bring long-awaited justice to these brave students.”

Advocates for student loan borrowers who were tricked into entering commercial colleges welcomed the announcement, but warned that hundreds of thousands of additional borrowers deserve to pay off their loans as well.

“The department needs to reach out to more than 700,000 borrowers with more than $ 3 billion in fraudulent debt from ITT,” said Eileen Connor, legal director for the Predatory Student Loan Project, which has represented more than one million former commercial college students.

“We cannot ask these borrowers to wait another day or pay another dollar on federal student loans that should never have been made in the first place,” she said, noting that the bankruptcy court had legally recognized that all 700,000 students were deceived first. for a commercial conglomerate, and that the outstanding balances to ITT were canceled along with any private loans to which its recruiters directed them.

The Predatory Student Loan Project represents 170,000 borrowers in a lawsuit filed against the Department of Education, Sweet v Cardona, over borrower protection claims that have been delayed for years.

In March, the Department of Education approved a $ 1 billion student loan repayment to 72,000 borrowers with previously approved borrower protection claims. The department also suspended income filing requests from borrowers whose student loans were repaid after they became permanently disabled, restoring payments to approximately 41,000 borrowers.

The Department of Education also intends to begin a rulemaking process to revise its borrower protection, disability and permanent disability discharge and other for-profit college issues, starting with a three-day public hearing next week.


Source link