U.S. Education Department Announces Loan Forgiveness for 18,000 Cases Related to ITT

"Students whose financial and academic trajectories may have been jeopardized by the abrupt 2016 closing of controversial for-profit ITT Technical Institute will be getting some relief from the federal government. The U.S. Department of Education (ED) announced approval of 18,000 borrower defense to repayment claims for people who attended the school," Diverse: Issues in Higher Education reports.

"The borrowers will get full loan discharges. This amounts to approximately $500 million in relief.

'I think the underlying debate in all of the borrower defense back-and-forth that we’ve had is really about two things,' said Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators (NASFAA), adding that a discussion has started over how liable should an institution be for the loan debt that their students take out if that institution was engaged in deceptive practices or marketing.

'But the second part of the debate, is to what extent do we want to try to be precise in measuring the harm that these students incurred versus expediently resolving or adjudicating their borrower defense claim,' he said.  'And to some extent, those two things have been competing forces throughout this entire conversation.'

Draeger said that the Trump administration wanted to be very precise about the harm that these students may have incurred during their time at ITT.

'The problem with that is where policy met implementation,' Draeger said. 'The implementation of that precision resulted in significant delays. And so now you have this huge backlog that has existed for many years of borrowers who, to some extent, deserve due process. And I think we’ve reached a tipping point where we ought to just start clearing these claims, paying off those loans and clearing the books so that the students and the federal government can move forward.'"

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Publication Date: 6/17/2021

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