I was reading through my feed (again), and I just saw that the Education Department approved more than 18,000 claims for federal student loan forgiveness.
Student cancellation is something that a lot of student borrowers are looking forward to. While there still hasn’t been any news about wide-scale cancellation, there are smaller forms of cancellation happening here and there.
Recently, the Education Department decided to approve claims of more than 18,000 borrowers in borrowers defense, who attended the now-defunct for-profit ITT Technical Institute.
It’s the latest effort of the Biden administration to give aid to those who have been defrauded by their for-profit colleges that made false claims regarding their certificates and degrees. This announcement brought Biden’s total cancellation amount through borrowers defense to $1.5 billion for approximately 90,000 borrowers.
What is Borrower Defense?
The borrower defense to loan repayment forgiveness, or simply borrower defense, is a loan forgiveness program issued by the U.S. Department of Education. It aims to help borrowers who feel like their school have defrauded them, misled them about the value of their degrees, or have engaged in activities that violated certain state laws regarding their loan or education.
I’m going to make another article regarding borrower defense in the future.
According to Education Secretary Miguel Cardona, “Our action today will give thousands of borrowers a fresh start and the relief they deserve after ITT repeatedly lied to them. Today’s action is part of the Biden-Harris Administration’s continued commitment to stand up for borrowers when their institutions take advantage of them. 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. This work also emphasizes the need for ongoing accountability so that institutions will never be able to commit this kind of widespread deception again.”
The approval covers two types of claims submitted by ITT student borrowers: claims regarding their employment prospects and claims regarding the ability to transfer credits.
So you might be wondering what ITT Technical Institute is.
What is ITT Technical Institute?
ITT Tech, for short, was a for-profit college founded in 1969. Until its closure on 2016, it had approximately 130 campuses across 38 states. This college has been involved in so many cases since 1998, from fraud, misrepresentation and concealment to grade inflation, deceptive marketing and use of coercive tactics to pressure students into enrolling.
It was only until September 6, 2016 that ITT Tech ceased all operations on all its campuses, attributing the closure to the Department of Education’s actions.
According to Education Department documents, they found that “ITT made repeated and significant misrepresentations to students related to how much they could expect to earn and the jobs they could obtain after graduation between 2005 and the institution’s closure in 2016. In reality, borrowers repeatedly stated that including ITT attendance on resumes made it harder for them to find employment, and their job prospects were not improved by attending ITT.”
Not only did ITT make false claims about a student’s job prospects, they also misled students into thinking that they can transfer their earned credits to other institutions.
“The Department found that credits rarely transferred and borrowers made little to no progress along their educational journey, yet were saddled with student loan debt as a result of their time at ITT.”
Because of these findings, the Education Department has approved to discharge the approximately $500 million loan balances from borrowers. They will be notifying borrowers of their approvals in the next coming weeks, and will work fast to discharge those loans.
While this is good news, it isn’t the full picture. This $500 million forgiveness is good news for merely 18,000 former ITT students. According to Eileen Connor, legal director of the Project on Predatory Student Lending, the Department still needs to address other fraudulent debt from ITT, for more than 700,000 borrowers with over $3 billion in debt.
“We cannot ask these borrowers to wait another day or pay another dollar toward federal student loans that never should have been made in the first place. This approval of a new category of borrower defense discharges is absolutely a step in the right direction. The Department is right that ITT systematically cheated students for over a decade, but we need more from the Department of Education and our clients need it fast.”
This is indeed great news for those who will be rewarded with loan forgiveness.
So if you’re reading this and you’re one of those who will be rewarded in the next coming weeks, I wanna congratulate you in advance. If you’re still waiting on loan forgiveness due to ITT, I wish this news gives you some hope.
A Step Towards Mass Cancellation?
With this approval, are we finally moving towards mass cancellation? I think there isn’t a good answer for this, unfortunately.
In the same Education Department announcement, “Today’s action continues efforts by the Department to provide targeted loan relief to student borrowers and ensure borrower defense and other relief programs are delivering promised assistance to borrowers.”
This statement already gives us an idea as to the Biden-Harris Administration’s focus on “targeted loan relief” rather than wide-scale cancellation. Since there aren’t any new announcement regarding mass student loan cancellation, all we can do is make assumptions on the matter.
I really don’t know where everybody’s positions are on this matter because there are those who are for cancellation, and there are those who are against it. I am for cancellation since I am part of those who need it. But I also see and understand the points against it. I’m not gonna go over those points because this article isn’t about that, but rather in another future article.
But personally, I don’t count on mass cancellation anymore because it has been so long since this topic was brought up. Biden never really promised us mass student loan cancellation when he ran for the presidency. He has only ever said that he was generally in favor of loan forgiveness, unlike others such as Warren and Sanders, who made explicit promises. This is why you hear Warren’s and Sanders’ name pop up often in regards to mass cancellation.
If you recall, Biden has only made the effort to “ask Congress” if he has the legal authority to cancel student loans by himself. He always dances on the line of, “let me ask Congress because they make the decision,” and has never acted on any student loan matters unilaterally.
And there we are as far as mass student loan cancellation. We don’t have concrete news about it and it’s all speculation and lobbying at this point.
My significant other went to a school that has closed due to fraud, has been waiting for an answer on his Borrowers Defense for 5 years. He did not attend ITT. It has been incredibly stressful and disheartening to see them focus on loan relief for very few schools, seems like the focus is pretty much ITT when their were other fraudulent schools involved and they are not addressing the back log of Borrowers Defense applications that have been sitting for years and were not attendees of ITT. It’s incredibly frustrating, painful, stressful. He did get an answer from DeVos and he had to do a reconsideration. They had sent a blanketed response to many Borrowers Defense applicants. Very incompetent department and leadership. I hope our entire government does not operate this way or we are in deep trouble. I hope for a better outcome with the new leadership, but I am afraid of the same slow/no progress as the DeVos era, unless it’s ITT-then ITT borrowers have it made. They need to clear ALL back log of Borrowers Defense applications that have been sitting for YEARS before they do anything else. I think I read the number was 130,000. They need to stop, all hands on deck and clear up and help the entire backlog of Borrowers Defense applications that have been sitting for years and then move forward. They need to take care of the oldest to the newest Borrowers Defense applicants and clear it up, keeping things current daily and not allowing this to ever happen again.
That’s a very big number! And I agree that the department still has a big number to go on. Not sure why they actually tried to resolve the ITT issue first when they had other applications that may have been in the works longer.
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