More than 563,000 borrowers saw more than $9 billion in student debt canceled since the beginning of 2021. The Department of Education confirmed the total as of August 31.
The announcement came after the agency said they canceled $1.1 billion in debt for students who attended the ITT Technical Institute. A total of 115,000 borrowers received relief from debt from the now-defunct educational institute.
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ITT Technical Institute Goes Under
ITT Technical Institute is the latest school to collapse under the weight of its finances. The Education Department said that ITT misrepresented its finances. It also misled students about unaffordable private loans allegedly portrayed as grant aid.
Founded in 1969, ITT operated 130 campuses across 38 states. It was one of the biggest for-profit institutes before it closed its doors in 2016.
“ITT’s malfeasance drove its financial resources away from educating students in order to keep the school in business for years longer than it likely would otherwise have, resulting in debts that are being discharged starting today,” the agency said.
Secretary Miguel Cardona also took a dig at the school. He said that ITT “hid its true financial state from borrowers” for years “while luring many of them into taking out private loans with misleading and unaffordable terms” that pushed borrowers to leave school.
He announced that the agency will extend the window of loan forgiveness to students who attended ITT as far back as March 31, 2008.
ITT Hid Its True Financial Nature
The extension to 2008 came after the Education department reviewed the events that led to ITT’s closure. The agency also reviewed the school’s filings with the Securities and Exchange Commission.
They also checked documents on the bankruptcy court proceedings. As a result, the agency determined that March 31, 2008, was the logical start date.
It was then that ITT officials “publicly disclosed the start of a financial scheme that kicked off a series of misrepresentations to hide the true nature of the school’s finances following a public loss of outside financing.”
Students who borrowed tuition at ITT between November 1, 2013, and July 1, 2020, will receive automatic debt relief. However, only those who did not enroll in another institution until at least within three years of ITT’s closure.
Previously, student borrowers during its final four months of operation were the only ones who received automatic relief in 2019.
Education’s Commitment to Cancel Student Debt
Cardona said the recent ITT decision is part of their commitment. The department will continue to “improve and use its targeted loan relief authorities to deliver meaningful help” to student loan availers.
“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,” he added.
Days before, the administration of President Joe Biden announced plans to forgive $5.8 billion in federal student loans. This covers over 323,000 borrowers identified by the Social Security Administration as totally and permanently disabled.
Student Debt Moratorium Ending Soon As Progressive Continue To Hammer Biden
Even with the efforts, progressive lawmakers continue to hammer Biden to cancel even more student debts. The current moratorium on student debt will expire on January 31, 2022.
This covers over 43 million borrowers nationwide. Once the moratorium lifts, students will once again be on the hook for about $1.6 trillion in debt owed to the federal government when the moratorium lapses in January next year.
Watch the News Today video reporting that the Biden Administration offers student loan discharges to another 115K Americans:
Do you agree with the Department of Education’s decision to cancel student debts from ITT and other institutions? What does this mean for other students who are paying or already paid their loans?
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