Fraudulently Charged Student Debt Finally Cancelled

Fraudulently Charged Student Debt Finally Cancelled

( – For-profit higher education institutions have been under the microscope for many years. Allegations that these schools focus more on making money than providing quality education have caused numerous facilities to close their doors for good.

One of those schools was ITT Technical Institute, which closed in September 2016. Despite the closure, former students are still fighting high loan balances and seeking relief arising from accusations of fraud against the school.

Fraudulent Claims

Students alleged ITT misled them about potential earnings and job prospects after graduation. In addition, they say the school promised their academic credits would transfer to other institutions when, in reality, they rarely did. Graduates also stated they felt listing the college on their resumes made finding a job more difficult as it was seen in a negative light.

Loan Cancellation

The US Department of Education investigated the claims of wrongdoing by ITT and determined the school did lie to students and falsely represent itself. The ruling will result in the cancellation of $500 million in student loans.

This comes under a federal borrower defense program that forgives loan debt in cases of fraud on the part of a higher education institution. The Department of Education will notify eligible borrowers of the loan cancellations starting in June or July 2021.

Not the First Time

This latest incident isn’t the first time the government has had to cancel loans for ITT students. When the school closed its doors in 2016, the Department forgave over $94.5 million in loans under the same borrower defense program.

This loan cancellation was due to a requirement of debt forgiveness for students who enroll within 120 days prior to a school closing. In this situation, the number of students impacted was around 7,500.

The saga of ITT is a good reminder that institutes of higher education must be transparent with students. Fraudulent claims designed to drive up enrollment numbers will catch up with a school.

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