For the third time since March, the U.S. Department of Education is planning to clear the loan debt for thousands of students who attended ITT Technical Institute, which had campuses in Arlington Heights, Oak Brook, Orland Park and Springfield.
The for-profit chain closed in 2016 after a series of sanctions by the Obama administration.
The most recent loan discharges will erase about $1.1 billion in debt for approximately 115,000 borrowers, according to the Education Department.
“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,” U.S. Secretary of Education Miguel Cardona said in a statement.
“Today’s action continues the department’s efforts to improve and use its targeted loan relief authorities to deliver meaningful help to student borrowers. At the same time, the continued cost of addressing the wrongdoing of ITT and other predatory institutions yet again highlights the need for stronger and faster accountability throughout the federal financial aid system.”
Claims piled up during the Trump administration, which stalled the forgiveness program and started processing claims only after a federal court demanded it.
Cardona has said forgiving the ITT student loans “will give thousands of borrowers a fresh start and the relief they deserve.”
This week’s move follows another round of loan discharges in June, when the Education Department cleared about $500 million in debt for some 18,000 students and another $1 billion in March for 72,00 borrowers.
Following the collapse of Corinthian Colleges Inc. 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.
Eligible borrowers will receive the loan forgiveness automatically, providing they didn’t enroll in another institution within three years of their school’s closure, according to the Education Department. Borrowers who enrolled elsewhere may still be eligible, but must first complete an application available at StudentAid.gov/closedschoolform.
The department says it will begin processing discharges in September, and borrowers should be notified in the following weeks.
Contributing: AP
