By Ovunc Kutlu
ANKARA (AA) – Citing fraudulent practices by the shuttered school, the US has canceled $500 million in loan debt for 18,000 former students of the ITT Technical Institute, the Department of Education said in a statement on Wednesday.
The institute – which was present in 38 of the US’ 50 states before it closed in 2016 – “misled students about the ability to transfer their credits to other institutions … 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," the statement said.
On March 18 the department took action to grant $1 billion relief to 72,000 debtors with previously approved borrower defense claims, saying: "This action reinstated discharges for 41,000 borrowers and will help protect another 190,000 borrowers from the risk of losing their discharges."
Borrower defense refers to cancelling loans if a school misled students or “engaged in other misconduct in violation of certain state laws,” according to the department.
The $1 billion “brings total loan cancellation under borrower defense by the Biden-Harris Administration to $1.5 billion for approximately 90,000 borrowers," it said.
On March 29 the Joe Biden administration cancelled an additional $1.3 billion in student loans for 41,000 borrowers with total and permanent disability.
This brought the Biden administration's total cancellation in student loans to around $2.8 billion.
Total student loan debt in the US, however, stands at almost $1.75 trillion, an average $39,808 debt per student, according to real-time data on usdebtclock.org as of Thursday.
Democratic members of Congress are pressing President Biden to use his executive power to issue a general loan forgiveness of up to $50,000 per person, citing debt’s role in keeping people from buying houses and cars, getting married, and taking other steps to protect their financial future.
