The Department of Education (ED) announced on Thursday that it will be discharging more than $1.1 billion in student loan debt for borrowers who attended the now-defunct ITT Technical Institute (ITT).
The benefit is expected to provide relief to 115,000 borrowers, of which 43% are currently in default.
“Today’s action continues the Department’s efforts to improve and use its targeted loan relief authorities to deliver meaningful help to student borrowers,” said U.S. Secretary of Education Miguel Cardona. “At the same time, the continued cost of addressing the wrongdoing of ITT and other predatory institutions yet again highlights the need for stronger and faster accountability throughout the federal financial aid system.”
According to ED, borrowers who are eligible for a closed school discharge and attended an institution that shut down between November 1, 2013 and July 1, 2020 will receive an automatic discharge as long as they did not enroll in another institution within three years of their school’s closure.
ED will begin processing discharges in September 2021 and borrowers will start receiving automatic discharges in the following weeks.
Rep. Bobby Scott (D-Va.) said the move by ED will give hundreds of thousands of students and families the long overdue relief they need and deserve.
“I applaud President Biden and Secretary Cardona for extending student loan relief to 115,000 student borrowers who were defrauded by ITT Technical Institute,” Scott said. “Numerous investigations into ITT’s conduct have uncovered a pattern of predatory and deceptive practices that tricked students into taking on debt they could not afford to attend schools that were on the brink of collapse.”
In recent weeks ED has announced a variety of targeted student loan debt relief by announcing a continuation of the student loan moratorium through January 2022, new plans for borrower defense claims, $5.8 billion in loan discharges for total and permanent disability (TPD) borrowers, as well as retroactively waiving interest fees on student loans held by 47,000 student veterans.
Publication Date: 8/27/2021