The federal government is forgiving nearly $4 billion in student loans.
The move affects students who attended ITT Technical Institute between January 2005 and September 2016. The Department of Education made the announcement Tuesday.
About 208,000 borrowers will have $3.9 billion in student loans discharged, the department said. The move affects even those who have not yet applied for a borrower defense to repayment discharge.
The loans will be wiped away with no additional action required.
ITT, a private for-profit institution with multiple locations around the U.S., was headquartered in Carmel, Indiana.
The decision followed a lengthy investigation into ITT in which the federal government combed through internal records and interviewed ITT managers, recruiters and students.
“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. “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. The Biden-Harris Administration will continue to stand up for borrowers who’ve been cheated by their colleges, while working to strengthen oversight and enforcement to protect today’s students from similar deception and abuse.”
ITT “engaged in widespread and pervasive misrepresentations related to the ability of students to get a job or transfer credits,” the department found. The institution also lied about the accreditation of its associate degree in nursing.
It ceased operations and closed all locations in September 2016 amid the Department of Education’s investigation.
In a separate matter, DOE formally notified DeVry University of its requirement to pay millions of dollars for approved borrower defense applications. DeVry can request a hearing if it wants to contest the action.
The department found DeVry “repeatedly misled students across the country” and inflated its job placement rate from 2008 through 2015. DeVry claimed a job placement rate of 90% when it was, in reality, closer to 58%. The institution manipulated data in order to get the higher figure.
It’s liable for about $24 million in approved borrower defense claims, the government said.
In an additional announcement, the Department of Education approved about 100 discharges for borrowers who enrolled in the medical assistant or medical billing & coding program at Kaplan Career Institute’s Kenmore Square location in Massachusetts from July 1, 2011, to February 16, 2012.
An investigation in Massachusetts found the institution “repeatedly lied” about its job placement rates. It closed in February 2013.
DOE said the Biden-Harris Administration has provided $32 billion in student loan relief for 1.6 million borrowers. About $13 billion represents borrowers who were taken advantage of by institutions.
The moves come as the administration considers a broader student loan forgiveness program.