Student Debt: Education Dept. Cancels $3.9 Billion — Is Your Loan Included?
The U.S. Department of Education has wiped another large batch of student loans off the books, announcing Tuesday that it will discharge all remaining federal student loans that borrowers received to attend ITT Technical Institute from January 1, 2005 through ITT’s closure in September 2016.
The decision means that around 208,000 borrowers will receive $3.9 billion in full loan discharges, including borrowers who have not yet applied for a “borrower defense to repayment discharge.” These borrowers will have federal student loans they received to attend ITT discharged without any additional action on their part, the Education Department said.
“It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises,” U.S. Secretary of Education Miguel Cardona said in a news release. “The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause.”
The announcement came just a couple weeks ahead of the scheduled end of the federal student loan payment pause that first went into effect in 2020, during the early days of the COVID-19 pandemic. The pause is slated to end on Aug. 31, 2022. As of August 17, President Biden had still not made a public announcement on whether he intends to extend the pause.
Meanwhile, many borrowers have already gotten permanent relief through actions by the Biden administration. Tuesday’s announcement on the ITT loans brings the total amount of loan relief approved by the administration to nearly $32 billion for 1.6 million borrowers, the Education Department said.
That total includes $9.6 billion for 175,000 borrowers through the Public Service Loan Forgiveness Program and $9 billion in total and permanent disability discharges for more than 425,000 borrowers.
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The total also includes $13 billion related to institutions that took advantage of borrowers. In February, the Education Department discharged an additional $415 million in student loans for nearly 16,000 borrowers who attended DeVry University and other for-profit schools accused of defrauding or misleading students.
In a separate announcement this week, the department said it formally notified DeVry that it is required to pay nearly $24 million for approved borrower defense applications.
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