Biden Administration Wipes Out $3.9 Billion In Student Loan Debt

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The U.S. Education Department recently announced the automatic cancellation of a collective total of $3.9 billion in student loan debt held by some 208,000 individuals who borrowed the money for attendance at ITT Technical Institute (ITT).

That institution was a for-profit college chain that closed in September 2016 after what authorities concluded was deception targeting prospective students about their prospects. The debt that the Education Department is cancelling is the entirety of what was lingering in connection to students attending ITT Technical Institute from January 1, 2005, through its eventual closure. Authorities scrutinized the chain for years before it shut down. Affected borrowers were set to see their debt eliminated without the need for action on their part.

“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,” according to U.S. Education Secretary Miguel Cardona. Although the Biden administration hasn’t rolled out a plan forgiving student loan debt across-the-board, targeted actions like this one have so far resulted in the announced elimination of nearly $32 billion in debt for 1.6 million borrowers.

The Education Department moved to forgive this debt held by former ITT students in connection to well-investigated concerns about the school. As summarized in a press release from the department, the chain “engaged in widespread and pervasive misrepresentations” about issues including how easily students might obtain employment after their attendance. The school also lied about the accreditation of an associate degree it offered in nursing, according to the Education Department. The department outlined a large breadth of evidence on which it based its conclusions, ranging from evidence collected by half the state attorney general offices in the country to Congressional findings and internal ITT records. The Education Department similarly relied on findings of deceiving students for the cancellation in June of $5.8 billion in student loan debt for some 560,000 ex-attendees of Corinthian Colleges, another defunct for-profit educational chain.

Like with ITT, personnel at Corinthian Colleges lied to students about their job prospects. Additionally, the school apparently falsified public job placement rates. Meanwhile, the pause on federal student loan payments that was instituted around the time that COVID-19 began shutting down the U.S. economy may soon be extended once again. Others who’ve benefited from the tens of billions in student loan debt cancelled by Biden administration officials include permanently disabled individuals, public service workers, and individuals whose schools closed in the middle of their enrollment. The Education Department is also seeking tens of millions of dollars from DeVry University — a still operating for-profit chain — to cover student loan debt held by former students victimized by the institution’s deception. The total amount sought from DeVry is some $24 million.