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U.S. Department of Education forgives $1.1 billion in student loans

Student loan debt
Posted at 12:02 PM, Aug 26, 2021
and last updated 2021-08-26 15:27:10-04

WASHINGTON, DC — Students who attended the now-defunct ITT Technical Institute may have their loans forgiven by the U.S. Department of Education which announced today it will discharge $1.1 billion to 115,000 borrowers.

ITT had a campus in Utah at the Sorenson Business Park which closed several years ago.

This decision is based on a review of the problems leading up to ITT's closure; borrowers eligible for loan discharges are those who did not complete their degree or credential and left ITT on or after March 31, 2008.

It's estimated 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 covers borrowers who attended ITT when it misrepresented its financial health, and misled students into taking out unaffordable private loans that were allegedly portrayed as grant aid.

ITT’s fraudulent action funneled financial resources away from students in order to keep the school in business.

“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. “

Cardona said the wrongdoing of ITT and other predatory institutions "yet again highlights the need for stronger and faster accountability throughout the federal financial aid system."

Under Department regulations, 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.

Borrowers who enrolled elsewhere but did not complete their program of study may still be eligible for a discharge, but will need to submit an application.