U.S. Department of Education announced on Thursday that it would forgive federal loans for students who attended ITT Tech and left after March 2008 without earning a degree.
Why is it important: This announcement is part of strengthening the efforts of the Biden administration to forgive student loan debt and follows a federal investigation into alleged fraudulent hiring practices at a commercial college.
- According to the Ministry of Education, ITT Tech allegedly launched a financial scheme in March 2008 to distort the “true nature” of school finance.
By numbers: 115,000 borrowers will lose $ 1.1 billion.
- Thus, according to the Ministry of Education, the total amount of debt written off since January 2021 was $ 9.5 billion, which affected more than 563,000 borrowers.
- The statement said that about 43 percent of those now eligible for debt forgiveness have defaulted on their loan obligations.
Memories: ITT Tech’s public commerce college collapsed in 2016 after it investigated “fraudulently recruiting students with inflated claims about their graduates’ earnings and career prospects,” according to New York Times…
What they’re saying: “For years, ITT has hidden its true financial situation from borrowers, while at the same time luring many of them to take out private loans on deceptive and unaffordable conditions, which could lead to borrowers dropping out of school,” said the US Secretary of Education. Miguel Cardona in a DE statement.
- “Today’s actions continue the Department’s efforts to improve and use its dedicated loan facility to provide meaningful assistance to student borrowers,” added Cardona.
Big picture: This is the latest step by the Biden administration to write off the debts of students who are victims of commercial college fraud.