The U.S. Education Department is erasing student debt for thousands of borrowers who attended a for-profit college chain that made exaggerated claims about its graduates’ success in finding jobs.
The Biden administration said it’s approving 18,000 loan-forgiveness claims from former students of ITT Technical Institute, a chain that closed in 2016 after a series of sanctions by the Obama administration.
ITT had campuses in Arlington Heights, Oak Brook, Orland Park and Springfield.
The new loan discharges will clear more than $500 million in debt.
Borrowers will be notified about their claim approvals in the coming weeks, according to the Education Department.
The debt-forgiveness move marks a step forward in the Biden administration’s effort to clear a backlog of claims in the borrower defense program, which provides loan forgiveness to students who were defrauded by their colleges.
Claims piled up during the Trump administration, which stalled the program and started processing claims only after a federal court demanded it. There are more than 100,000 pending claims.
Education Secretary Miguel Cardona said forgiving the ITT student loans “will give thousands of borrowers a fresh start and the relief they deserve.”
The move follows another round of loan discharges in March, when the Education Department cleared $1 billion in federal student debt for 72,000 borrowers. Those claims all came from former students of for-profit colleges.
Borrower advocates applauded the new approvals but called for swift relief for the thousands of other students whose claims are still pending, including many who attended ITT Tech.
“It appears the Biden administration genuinely wants to help people who are owed discharges,” said Alex Elson, vice president of Student Defense, a Washington legal group. “But that makes it all the more confounding that they are so hesitant to use their authority to immediately and automatically help the countless additional borrowers who are still waiting.”
Borrower defense is among several education programs targeted for an overhaul by the Biden administration as it works to reverse Trump-era policies.
The program was rarely used until 2015, when the Education Department received thousands of claims from former students of Corinthian Colleges. The chain of for-profit colleges had recently shut down following findings it lied to students about job-placement success.
Following the collapse of Corinthian and other beleaguered for-profit colleges, the Obama administration moved to make it easier for students to get loans erased. But the overhaul was reversed by the Trump administration, which later wrote its own rules, making it tougher to get relief. In changing the rules, then-Education Secretary Betsy DeVos said it had become too easy to get loans forgiven.
Many of the 18,000 claims from ITT Tech were approved after the Education Department found that the company lied about graduates’ job prospects. The agency said ITT made “repeated and significant misrepresentations” about its ability to help students get jobs. In reality, many students said it was harder to find employment when they listed ITT on their resumes, the department said.
Other claims were approved after the department found that ITT misled students about being able to transfer credits to other colleges. Credits were rarely accepted elsewhere.
