facebook linkedin twitter

Loan Relief Granted to Defrauded For-Profit College Students

June 16, 2021by Collin Binkley, AP Education Writer
FILE - Students find the doors locked to the ITT Technical Institute campus in Rancho Cordova, Calif. The U.S. Education Department says it's 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 is approving 18,000 loan forgiveness claims from former students of ITT Technical Institute, a chain that closed in 2016. (AP Photo/Rich Pedroncelli, File)

The U.S. Education Department said Wednesday it’s 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 is approving 18,000 loan forgiveness claims from former students of ITT Technical Institute, a chain that closed in 2016 after being dealt a series of sanctions by the Obama administration. The new loan discharges will clear more than $500 million in debt.

The 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 only started processing claims after a federal court demanded it. There are now more than 100,000 pending claims.

In announcing the new action, Education Secretary Miguel Cardona vowed to continue standing up for students who are deceived by their schools.

“Our action today will give thousands of borrowers a fresh start and the relief they deserve,” Cardona said in a statement. “Many of these borrowers have waited a long time for relief, and we need to work swiftly to render decisions for those whose claims are still pending.”

It 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 defense is among several education programs targeted for an overhaul by the Biden administration as it works to reverse Trump-era policies. Cardona is hosting a series of hearings this month as his agency considers changes to that policy and others.

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 that it lied to students about job placement rates.

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.

Cardona began chipping away at DeVos’ rules in March when he rescinded a formula that allowed the Education Department to give only partial loan discharges to students whose claims were approved. All borrowers granted relief will now get their loans cleared in full.

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 their ability to transfer course credits to other colleges. Credits were rarely accepted elsewhere, the department said, leaving students with “little to no progress” in their academic careers.

Borrowers will be notified about their claim approvals in the coming weeks, the agency said.

Education

October 25, 2021
by Victoria Turner
FCC Receives Another $1.3B in Funding Requests for Schools, Libraries, Consortia

WASHINGTON — The Federal Communications Commission continues efforts to close the homework gap, announcing another $1.3 billion in funding requests... Read More

WASHINGTON — The Federal Communications Commission continues efforts to close the homework gap, announcing another $1.3 billion in funding requests were received during the second application window of the Emergency Connectivity Fund program today. This second funding round is poised to support another 2.4 million connected... Read More

Opponents of Critical Race Theory Seek to Flip School Boards

GUILFORD, Conn. (AP) — A racial reckoning began years ago for the Guilford school system, first with an episode in... Read More

GUILFORD, Conn. (AP) — A racial reckoning began years ago for the Guilford school system, first with an episode in which a student wore blackface makeup to a home football game and then a fraught debate over the elimination of its mascot, the Indians. After the... Read More

Nursing Schools See Applications Rise, Despite COVID Burnout

STORRS, Conn. (AP) — Nurses around the U.S. are getting burned out by the COVID-19 crisis and quitting, yet applications... Read More

STORRS, Conn. (AP) — Nurses around the U.S. are getting burned out by the COVID-19 crisis and quitting, yet applications to nursing schools are rising, driven by what educators say are young people who see the global emergency as an opportunity and a challenge. Among them... Read More

October 13, 2021
by Reece Nations
Native American Equity Initiative Planned to Strengthen Tribal Education

WASHINGTON — The White House will institute a new federal policy initiative to help advance educational equity and economic opportunity... Read More

WASHINGTON — The White House will institute a new federal policy initiative to help advance educational equity and economic opportunity for Native Americans by vitalizing tribal colleges and universities. The executive order, signed by President Joe Biden on Monday, designates the secretary of the Department of... Read More

COVID Vaccine Mandate Takes Effect for NYC Teachers, Staff

NEW YORK (AP) — New York City teachers and other school staff members were all supposed to be vaccinated against... Read More

NEW YORK (AP) — New York City teachers and other school staff members were all supposed to be vaccinated against COVID-19 when the bell rang Monday morning in one of the first school district mandates in the country requiring employees to be inoculated against the coronavirus.... Read More

October 1, 2021
by Tom Ramstack
Ed Dept. Officials Tell Congress Students Are Protected for In-Class Education

WASHINGTON -- Biden administration officials tried to assure a Senate panel Thursday that the nation’s schools are following the right... Read More

WASHINGTON -- Biden administration officials tried to assure a Senate panel Thursday that the nation’s schools are following the right strategy to remain open while minimizing the risk of spreading COVID-19. The new school year is barely a month old but controversies still rage in lawsuits... Read More

News From The Well
scroll top