The U.S. Department of Education has approved 18,000 claims for people who attended the now-defunct ITT Educational Services Inc., which was headquartered in Carmel and shut down in 2016. The department says the move will result in about $500 million in relief for borrowers.
The borrowers are set to receive 100% loan discharges and the department says it will begin notifying borrowers in the coming weeks.
The department cites evidence which shows ITT made “repeated and significant misrepresentations to students related to how much they could expect to earn and the jobs they could obtain after graduation.” Additionally, ITT was found to have misled students about the ability to transfer their credits to other higher education institutions.
“Our action today will give thousands of borrowers a fresh start and the relief they deserve after ITT repeatedly lied to them,” Education Secretary Miguel Cardona said in a news release. “Many of these borrowers have waited a long time for relief, and we need to work swiftly to render decisions for those whose claims are still pending. This work also emphasizes the need for ongoing accountability so that institutions will never be able to commit this kind of widespread deception again.”
In September 2016, ITT announced plans to discontinue operations. The for-profit educational company had halted enrollment the previous month after being banned by the Department of Education from enrolling students using federal financial aid after failing to meet accreditation standards.
At the time, ITT had approximately 40,000 students in 39 states. More than 8,000 jobs were lost as a result of the company’s shutdown as well.
The department says the move brings the total amount of loan cancellation under borrower defense by the Biden-Harris administration to $1.5 billion for some 90,000 borrowers.