Biden forgives $4 billion in federal student loan debt for ITT Technical Institute borrowers
Students who took out federal student loans to attend ITT Technical Institute will have their debts automatically wiped away, the Biden administration announced Tuesday.
That will amount to $4 billion in loan discharges for 208,000 borrowers who attended the fraudulent institution from Jan. 1, 2005, through September 2016, when it closed down.
The discharge includes those who have not applied for a borrower defense loan discharge, which allows students whose schools "misled" them or "engaged in other misconduct in violation of certain state laws" to apply to have their loans forgiven. Borrowers will not have to take any action on their own to receive the loan forgiveness.
"It is time for student borrowers to stop shouldering the burden from ITT's years of lies and false promises," said U.S. Secretary of Education Miguel Cardona in a press release.
Cardona says that for years, ITT 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." The Education Department has previously forgiven $1.9 billion in loans for 130,000 ITT students.
The sham university closed down in 2016 after the federal government barred it from accepting students who took out federal student loans.
“This is a life-changing announcement for thousands of people who only wanted to improve their lives and trusted the wrong people to help them do it," says Libby DeBlasio, senior counsel at Student Defense, a nonprofit student loan advocacy group.
To date, the Biden administration has forgiven nearly $32 billion in student loan debt for an estimated 1.6 million borrowers, according to the Education Department.
That said, there is still no word from Biden on whether federal student loan payments will restart in just over two weeks, or if he will enact broader student loan forgiveness for all federal borrowers. The president has repeatedly said he would have an answer on cancellation—reportedly to be around $10,000 per borrower—by the end of August.
This story was originally featured on Fortune.com
