Education Department Cancels $3.9B in Federal Loans for ITT Tech Students

The department previously approved student loan discharge for specific ITT Tech programs, but this move offers broad forgiveness for approximately 208,000 borrowers.

Published August 16, 2022

Edited by Alex Pasquariello
Education Department Cancels $3.9B in Federal Loans for ITT Tech Students
Higher Ed Policy
Photo by Susan Goldman / Bloomberg / Getty Images

  • The for-profit ITT Tech system was accused of predatory behavior in advising students to secure loans.
  • Previous actions against ITT Tech resulted in $1.9 billion in discharged loans.
  • The Biden administration has discharged $13 billion in debt for 1 million borrowers through borrower defense and closed school discharge claims.

The Department of Education (ED) announced Tuesday it would discharge $3.9 billion in federal student loans that borrowers received to attend ITT Technical Institute (ITT).

ED’s latest round of automatic student debt forgiveness applies to federal loans used to attend ITT between Jan. 1, 2005 and its closure in September 2016. Approximately 208,000 former students are expected to benefit from this relief.

The decision was made following an investigation into the for-profit system’s recruitment methods, and the quality of its programs, according to ED.

"It is time for student borrowers to stop shouldering the burden from ITT's years of lies and false promises," Secretary of Education Miguel Cardona said in a statement. "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."

This relief includes borrowers who had not filed a borrower defense claim against ITT Tech; ED will discharge their loans without any additional action.

ED has already approved over $1 billion in debt relief for former ITT Tech students in the past. According to the department, the Biden administration has discharged student loan debt for 130,000 students for a total of $1.9 billion to date.

Most recently, ED last February discharged $3.1 million in debt for 130 former students of ITT’s associate degree in nursing program. That was the department’s fourth action against ITT Technical Institute since 2021.

Additionally, the Consumer Financial Protection Bureau (CFPB) sued ITT in 2014 for pressuring students to take out private student loans. According to ED, CFPB’s work resulted in ITT being barred from engaging in predatory private student lending and led to $498 million in private student loan cancellation.

Democratic Sen. Dick Durbin of Illinois praised ED’s decision to erase debt for former ITT students.

“It’s been almost six years since the disastrous collapse of the infamous for-profit college chain, ITT Tech,” he said in a statement. “When the ITT Tech house of cards fell in a cloud of scandal, students and taxpayers were the ones left holding the bag. After years of urging [ED] to act, I’m relieved to see that these students are finally receiving the relief they are owed after being conned by ITT Tech’s exploitive marketing tactics and faulty degrees.”

The Biden administration has taken aim at for-profit college and university systems over the past two years. His most sweeping measure came in early June when ED announced it would discharge $5.8 billion in student debt for 560,000 former students who attended schools owned by Corinthian Colleges.

The Biden administration has discharged $13 billion in debt for 1 million borrowers through borrower defense and closed school discharge claims, according to ED’s announcement.