Student Debt: Education Dept. Cancels $3.9 Billion — Is Your Loan Included?

beautiful young woman working at home.
elenaleonova / Getty Images

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.

Explore: Your Biggest Money Etiquette Questions Answered
Here It Is: 
Our 2022 Small Business Spotlight

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.

Save for Your Future

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.

Take Our Poll: Do You Tip for Service?

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.

More From GOBankingRates

Share This Article:

Save for Your Future

About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
Learn More

Best Bank Accounts for September 2022

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.