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The Department of Education is providing closed-school discharges to 115,000 borrowers who attended the now-defunct ITT Technical Institute, canceling more than $1.1 billion in student loans.
The department said Thursday that the decision was based on "a new review of the problems leading up to ITT's closure." It impacts those borrowers who didn't complete a degree and left ITT Tech on or after March 31, 2008, which is when the for-profit institution began publicly disclosing the beginnings of a financial scheme that led to misrepresentations of its finances.
About 43 percent of the borrowers receiving the closed-school discharge are currently in default on their loans, according to the department's estimations.
“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,” said Secretary of Education Miguel Cardona in a release. “Today’s action continues the Department’s efforts to improve and use its targeted loan relief authorities to deliver meaningful help to student borrowers.”
In June, the department canceled $500 million in loans for ITT Tech students who said they had been defrauded by the institution. About 7,000 of the borrowers covered by the closed-school discharge also have approved borrower defense to repayment claims.
The Biden administration has now forgiven $9.5 billion in student loans since the beginning of the year.
