$73M in debt wiped out for Maryland's former ITT Tech students
BALTIMORE -- The Department of Education will forgive nearly $4 billion in debt for over 200,000 former ITT Technical Institute students across the country, including nearly 4,000 in Maryland, Attorney General Brian Frosh announced Tuesday.
The move from the Biden administration, which wipes out $3.9 billion in federal student loan debt, comes in response to calls from Frosh and other members of a multi-state coalition to cancel debt for students defrauded by the defunct for-profit school.
Authorities said the for-profit school defrauded students by getting them to enroll and take out federal loans based on false or misleading advertising about the value of an ITT Tech degree and the potential for high-paying jobs upon graduation.
"Many ITT Tech students were misled, coerced, or victimized by other illegal misconduct. The students incurred thousands of dollars in debt, often for useless degrees or credits," Attorney General Frosh said, adding that he was pleased with the Department of Education's action.
The new policy will automatically cancel any remaining federal student debt that was used to attend ITT Tech from 2005 through its closure in 2016, the Associated Press reports. Before shutting down, ITT Tech was among the largest for-profit college chains in the country.
The Education Department has previously approved the cancellation of $1.9 billion in debt held by former ITT Tech students, largely for students who applied for relief saying they were misled by the company. The new policy will not require borrowers to apply for relief.
Under federal law known as borrower defense, the Department of Education can forgive student loans when borrowers who obtained loans were deceived, Frosh's office said.
In 2019, Frosh's office won a settlement of about $6 million in debt relief for 582 former ITT Tech students in Maryland as part of a multi-state agreement with Student CU Connect CUSO. Frosh and other attorneys general accused ITT Tech of pressuring students into obtaining loans from CUSO, which had interest rates that were much higher than those of federal student loans.
The move provides an estimated $74,300,0000 in relief to 3,830 Marylanders who attended ITT Tech from January 2005 through September 2016.
