Feds forgive $3.9 billion in debt for 208,000 former ITT Technical Institute students
The U.S. Department of Education has forgiven $3.9 billion in debt owed by former students of ITT Technical Institute, saying they were defrauded by the now defunct for-profit college.
As part of an ongoing crackdown on for-profit schools, the agency said on Tuesday that it has erased loans for 208,000 students who attended ITT Technical Institute from 2005 until its collapse in 2016.
"For years, ITT's leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause," U.S. Secretary of Education Miquel Cardona said in a statement.
It is the second time this year the Biden administration has wiped away loans for students who attended a for-profit college. The government in June erased almost $6 billion owed by more than 500,000 students who attended Corinthian Colleges before its implosion in 2015.
The Education Department has forgiven a total of $13 billion in loans related to institutions found to have taken advantage of borrowers with such misleading claims, it said.
While both ITT and Corinthian went belly up, Cardona's department this week requested $24 million from the still-operating DeVry University to recoup losses for loans canceled for at least 1,800 borrowers. DeVry defrauded attendees by misleading them on employment prospects for graduates, education officials found.
DeVry's marketing included claims that 90% of its graduates actively looking for employment found a job in their field within six months. In reality that rate was closer to 58%, they found.
Currently owned by investment firm Cogswell Capital, DeVry said the school is reviewing the notice from Department of Education.
"We continue to believe the department mischaracterizes DeVry's calculation and disclosure of graduate outcomes in certain advertising, and we do not agree with the conclusions they have reached," a spokesperson for DeVry said in an email.
The Biden administration by the end of the month is expected to announce whether it'll cancel the debt of 43 million federal student loan borrowers, with a pandemic pause on the debt payments set to expire as of September.