The Biden administration has canceled the student loan debt of former students who attended a now-shuttered for-profit college, a decision that will give 300 Connecticut people a total of $5 million in relief.
Education Secretary Miguel Cardona made the announcement Monday as millions of borrowers across the U.S. await President Joe Biden’s impending sweeping decision on whether to potentially forgive tens of thousands of dollars in student loan debt and whether those payments they will resume on September 1. .
Connecticut Attorney General William Tong said he was one of 25 attorneys general who filed a borrower defense petition urging the Department of Education to forgive the debt of those who attended ITT Tech, citing “tactics scams” used by the school to recruit students.
The federal ruling covers borrowers who attended ITT Tech from Jan. 1, 2005, until the school closed in September 2016. It also includes those who were enrolled at the school but have not filed a defense of borrower, which allows them to request a repayment of the loan if they have been defrauded. The Department of Education had previously granted loans for 130,000 ITT Tech borrowers.
“Today’s action will provide billions of dollars in relief, including to between 5 and 300 borrowers in Connecticut,” Tong said in a statement. “Secretary Cardona has been an aggressive leader in bringing relief to students and holding predatory institutions accountable.”
Beyond Connecticut, Cardona said a total of 208,000 borrowers nationwide will get $3.9 billion in loan discharges. He said there is evidence showing ITT Tech “engaged in widespread and widespread misrepresentations related to students’ ability to obtain employment or transfer credits,” as well as lying about the accreditation of the associate’s degree in nursing.
“The evidence shows that for years, ITT leaders intentionally misled students about the quality of their programs in order to benefit from federal student loan programs, without considering the hardships this would cause,” he said. said Cardona, who was Connecticut’s commissioner of education. department before his appointment to serve in Biden’s cabinet.
So far, the Biden administration has approved nearly $32 billion in student loan relief for about 1.6 million people. In addition to the news about ITT Tech on Monday, Cardona said his agency formally notified DeVry University that it had to pay millions of dollars for approved borrower defense applications. It also approved loan waivers for those enrolled in a program at the Kaplan Career Institute location in Massachusetts for about a decade.
But students in Connecticut and across the country await Biden’s long-awaited announcement on student loan debt in a matter of days.
He is reportedly considering writing off about $10,000 in student loan debt for borrowers making less than $150,000, though he may go with a different amount, or none at all. It’s one of Biden’s 2020 presidential campaign promises, though advocates are pushing for a much higher amount of up to $50,000 per borrower.
The president is also expected to decide soon whether to grant another pause in student loan repayments and interest accruals, which are scheduled to be lifted at the end of the month. Biden ordered the Department of Education to freeze reimbursements when he took office in early 2021, but has extended it several times due to financial hardship caused by COVID-19.
These announcements will come less than three months before the midterm elections, which could have a profound impact on how Biden governs and what he might pass in the remaining two years of his current term.