(The Center Square) – The U.S. Department of Education announced Tuesday it’s discharging all remaining federal student loans for former ITT Technical Institute students.
This action applies to 900 borrowers in Iowa, who will get $15.7 million in debts discharged, a news release from Iowa Attorney General Tom Miller’s office said. Borrowers received the loans to attend the for-profit school from 2005 through September 2016, when it closed. It also includes borrowers who have not yet applied for a borrower defense to repayment discharge.
“This is great news, and it’s long overdue,” Miller said. “Our office has worked hard to provide relief for students who were deceived and incurred debts for a questionable education at ITT Tech.”
Federal Student Aid Chief Operating Officer Richard Cordray said the work holds ITT Technical Institute accountable.
“Students who put their trust in ITT were lured by lies about their job prospects and did not get the quality education they were promised,” Cordray said. “These students now will have their remaining federal student loan debt discharged without needing to take any further action.”
The U.S. Department of Education has also formally notified DeVry University that the institution will have to pay millions of dollars for approved borrower defense applications.
Miller’s office in September 2020 agreed to obtain $1.3 million in debt relief for former ITT Tech students in Iowa as part of a settlement with PEAKS Trust, one of the for-profit school’s private loan programs. The agreement involved 48 attorneys general and the federal Consumer Financial Protection Bureau.
In June 2019, the Iowa Attorney General was part of a $168 million settlement with Student CU Connect CUSO, LLC, that provided debt relief for 18,664 former ITT students. Student CU Connect CUSO offered loans to finance students’ tuition at ITT Tech.
On the national level, the U.S. Department of Education’s action discharges $3.9 billion for 208,000 borrowers.
The department said in its news release Aug. 16 that DeVry is liable for nearly $24 million for approved borrower defense claims.
The department announced in February 2022 that it approved claims after finding that from 2008 through 2015, DeVry had repeatedly misled prospective students across the country. While DeVry claimed that 90% of its graduates who actively seek employment obtained jobs in their field of study within six months of graduation, the institution’s actual job placement rate was around 58%, the department said.
In its claimed rates, DeVry included students who found employment prior to graduation and by excluded students who did not conduct a job search in the college’s preferred manner, the release said.
The department said the number of approved discharge amounts will likely grow as it continues to adjudicate additional applications from former DeVry students.
DeVry has 20 days from issuance of the demand to submit additional written material or request a hearing. Otherwise, the Department will impose the liabilities and require DeVry to pay, or enter an agreement to pay, the amount.
