Jan. 16, 2020 7:33 pm ET

 

WASHINGTON—The Education Department is providing loan relief to some 7,800 former students of the ITT Technical Institute, with debts totaling $95.1 million being forgiven by the government years after the giant for-profit school chain closed.

 

The department said that it has identified 7,878 former students of ITT Tech as eligible for a program in which loans are discharged automatically within three years of a school closure. Of those borrowers who attended the school, 7,697 had received loan forgiveness as of Jan. 3.

 

The department’s action was disclosed in a letter sent by Brian Siegel, a lawyer for its postsecondary education division, to National Student Legal Defense Network, a borrower advocacy group pressing for the debt relief.

 

ITT Tech, once among the nation’s largest for-profit college chains by revenue, filed for bankruptcy and abruptly shut down in 2016, forcing more than 40,000 students to look for another school and leaving many with large student loans.

The loan discharge for some of those students is part of the relief the Education Department provided in recent weeks for over 30,000 borrowers who attended schools that have closed. The department didn’t provide a breakdown of schools the other borrowers attended.

“Most of the borrowers who have been identified as eligible attended small schools with less than 10 eligible borrowers,” Mr. Siegel wrote.

Among the former ITT Tech students, the relief only applies to those who attended the school at the time of its closure in September 2016, or within 120 days prior to the closure. Those who had left the school earlier or transferred credits to other schools in some cases aren’t covered by the program.

In addition to the discharge of the existing loan balances, eligible former students who continued to make loan payments after the school closed will receive reimbursements for those payments. The department said that such repayments will be handled by the Treasury Department and that their amounts are unknown.

The confirmation of the discharge followed concerted efforts by lawmakers, a bipartisan group of state attorneys general and borrower advocates to press the department to implement the loan discharge as required by law. Many borrowers hadn’t received automatic discharge three years after ITT Tech’s closure.

Read more at WSJ.com

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