Extended Closed School Discharge Will Provide 115K Borrowers from ITT Technical Institute More Than $1.1B in Loan Forgiveness
August 26,2021
Today, the U.S. Department of Education announced it will make $1.1 billion in closed school discharges available to an additional 115,000 borrowers who attended the now-defunct ITT Technical Institute (ITT). This decision is based on a new review of the problems leading up to ITT’s closure. These borrowers did not complete their degree or credential and left ITT on or after March 31, 2008. The Department estimates that 43 percent of these borrowers are currently in default. Today’s action brings the total amount of loan discharges approved by the Department since January 2021 to $9.5 billion, affecting over 563,000 borrowers.
This action extends relief to borrowers whose attendance at ITT overlapped with a period during which the institution engaged in widespread misrepresentations about the true state of its financial health and misled students into taking out unaffordable private loans that were allegedly portrayed as grant aid. ITT’s malfeasance drove its financial resources away from educating students in order to keep the school in business for years longer than it likely would otherwise have, resulting in debts that are being discharged starting today. Approximately 7,000 of the borrowers covered by today’s closed school discharge announcement also have approved borrower defense to repayment claims.
“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 U.S. Secretary of Education Miguel Cardona. “Today’s action continues the Department’s efforts to improve and use its targeted loan relief authorities to deliver meaningful help to student borrowers. 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.”
