The Training Division canceled $500 million in pupil debt for defrauded ITT college students.


The Department of Education on Wednesday wiped out more than $ 500 million in student loans to clean up a poorly secured aid program for students defrauded by their schools.

For the first time in more than four years, the department approved new grounds for claims through what is known as the Borrower Defense Program and waived a for-profit chain for 18,000 applicants attending the ITT Technical Institute that abruptly collapsed in 2016, the debt allowing students cheated by their schools to waive their federal student loans.

The new permits concerned applications from students who attended ITT between 2005 and 2016 who stated they were deceived about their earning potential, and from students who participated between January 2007 and October 2014 who said they were about their ability to Transferring credits to other institutions has been deceived.

“Our action today will give thousands of borrowers the fresh start and the relief they deserve after ITT has repeatedly lied to them,” said Education Minister Miguel A. Cardona.

Eileen Connor, legal director of Project on Predatory Student Lending, a group that has won multiple legal victories against the department in processing borrowers’ defense claims, praised Wednesday’s announcement but said Mr Cardona had to go further.

“The department needs to reach out to more than 700,000 borrowers with over $ 3 billion in fraudulent debt from ITT,” said Ms. Connor. “We can’t ask these borrowers to wait another day or pay another dollar for government student loans that should never have been made.”

The borrower defense program had largely failed for the past four years. In January 2017, at the end of the Obama administration, the department upheld claims by some students visiting ITT’s California campus – a move many hopeful applicants saw as a token of impending relief.

But the aid program essentially stopped working for much of President Donald J. Trump’s administration. Betsy DeVos, his education secretary, condemned the system as a giveaway for “free money” and repeatedly reaped the protection measures offered. Then, in her final year in office, after minutes of scrutiny, she turned down more than 130,000 claims from borrowers. Tens of thousands of other claims languished for years.

Mr. Cardona has promised to reverse this tide. “Many of these borrowers have been waiting a long time for relief and we need to work quickly to make decisions for those whose claims are pending,” he said.

Almost 108,000 applicants who say they have been defrauded by their schools are still awaiting decisions. The department has not yet announced whether it is addressing the sensitive issue of re-examining Ms. DeVos’ denials.