Roughly 18,000 borrowers who were scammed by their college will have their federal student loans discharged, amounting to approximately $500 million in relief. These borrowers attended ITT Technical Institute, a for-profit college that collapsed in 2016.
Roughly 18,000 borrowers who were scammed by their college will have their federal student loans discharged, amounting to approximately $500 million in relief, the Department of Education announced Wednesday.
“Many of these borrowers have waited a long time for relief, and we need to work swiftly to render decisions for those whose claims are still pending,” Cardona said. “This work also emphasizes the need for ongoing accountability so that institutions will never be able to commit this kind of widespread deception again.”
Eileen Connor, the legal director of the Project on Predatory Student Lending, which represents former for-profit college students in litigation, called the Department’s decision to approve the 18,000 borrower defense claims “a step in the right direction,” in a statement Wednesday. Borrower advocates have pushed the agency to discharge debt in batches when it’s clear borrowers who attended a college during a given period were exposed to the same illegal conduct.
Carrie Wofford, the president of Veterans Education Success, said in a statement that the courage of veterans and whistleblowers allowed the organization to provide the Department with evidence. More than 18,000 ITT former students have already had their private loans cancelled through a deal between the CFPB state attorneys general and the company that managed private student debt on behalf of the school. In addition, in 2018, the judge overseeing ITT’s bankruptcy approved a settlement cancelling $600 million in debt 750,000 former students owed to the school.
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