INDIANAPOLIS (WISH) — The federal government will cancel student loans for thousands of students who attended the now defunct ITT Technical Institute.
The US Department of Education said Tuesday it will cancel all remaining federal student loans borrowers received for attending ITT Tech between Jan. 1, 2005, and the school’s closure in September 2016.
These borrowers will have their loans canceled or waived without any further action on their part, the Department of Education said in a statement.
The decision will result in the repayment of nearly $4 billion to 208,000 former ITT students, including all borrowers who have not yet applied for a “defense of the borrower to the repayment discharge.“
“It’s time for student borrowers to stop carrying the burden of years of ITT lies and false promises,” US Secretary of Education Miguel Cardona said in a statement. “Evidence shows that for years, ITT leaders 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.”
ITT Technical Institute was a for-profit technical institute based in Carmel. ITT has been the subject of numerous government investigations into grade inflation, recruiting tactics, placement numbers, accreditation issues, and predatory lending practices.
The company closed its 130 U.S. campuses in September 2016, a month after the Department of Education banned ITT from enrolling new students who receive financial aid.
Indiana State Senator JD Ford, a Democrat, fought for these Hoosiers at the State House.
“A lot of them I spoke to struggled to figure out how to pay the rent, pay the groceries and also pay off that bill that they didn’t even have a receipt to show,” Ford said.
Since ITT Tech closed, federal authorities have approved $1.9 billion in loan releases for approximately 130,000 former students.