Down Debt

Biden cancels student debt for ITT Technical Institute borrowers

Students who took out federal student loans to attend ITT Technical Institute will have their debts automatically forgiven, the Biden administration announced Tuesday.

This will represent $4 billion in loan repayments for 208,000 borrowers who patronized the fraudulent institution from January 1, 2005 to September 2016, when it closed.

The release includes those who have not requested a borrower’s defense loan release, allowing students whose schools have “misled” them or “engaged in other misconduct in violation of certain state laws” to request forgiveness of their loans. Borrowers will not have to take any action on their own to qualify for loan forgiveness.

“It’s time for student borrowers to stop carrying the burden of ITT’s years of lies and false promises,” US Secretary of Education Miguel Cardona said in a press release.

Cardona says that for years, ITT executives “intentionally misled students about the quality of their programs in order to take advantage of federal student loan programs, regardless of the hardship that would cause.” The Department of Education previously canceled $1.9 billion in loans for 130,000 ITT students.

The fake university closed in 2016 after the federal government banned it from accepting students who took out federal student loans.

“This is a life-changing announcement for thousands of people who just wanted to make their lives better and trusted the wrong people to help them do so,” says Libby DeBlasio, senior counsel at Student Defence, a non-profit student loan advocacy group.

To date, the Biden administration has forgiven nearly $32 billion in student loan debt for about 1.6 million borrowers, according to the Department of Education.

That said, Biden remains unsure if federal student loan repayments will resume in just over two weeks, or if he will enact a broader student loan forgiveness for all federal borrowers. The president has repeatedly said he will have a response on the cancellation — which would be around $10,000 per borrower — by the end of August.

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