US student loan debt has doubled since 2010
Student loan debt has doubled since 2010. It is believed that more than 30% of American adults are in debt.
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Former students who took classes at the defunct ITT Tech have regained something they lost more than four years ago: hope.
The US Department of Education is cutting federal student loans for 18,000 former students, wiping out roughly $ 500 million in debt. The scope of the move is limited – ITT had 35,000 students when it collapsed in 2016 and many more in previous years who have strong arguments in favor of debt relief – and beneficiaries of the aid have yet to be notified.
Still, the Department of Education’s move to provide relief to people who are in debt from their cursed days as ITT students fulfills a promise made by former President Barack Obama. It took a long time.
The Obama administration has been acting aggressively – perhaps too aggressively, I argued in my very first IndyStar column in 2016 – to shut down ITT and other seedy for-profit college actors while reshaping a federal program called borrower defense for repayment. to get rid of the debts of students who can prove they have been defrauded.
But after Obama dropped the hammer on ITT and before he could help students who enrolled there, Donald Trump became President and appointed Betsy DeVos as Secretary of Education. DeVos paused the Obama administration’s policy of student debt relief and eventually made it much harder for borrowers to get access to help by claiming they had been scammed.
That period of limbo left former ITT students with a worst-case scenario: no school, mountains of debt, discredited classwork, difficulty moving to other schools and, even if they’d already graduated, the shame of ITT in record their résumé.
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ITT’s sketchy recruiting tactics and eventual demise have derailed the lives of countless people. ITT primarily harmed the military, who had used up their education funds to take courses at the bankrupt company and ran out of money to go elsewhere.
But President Joe Biden’s Secretary of Education, Miguel Cardona, picked up where the Obama administration left off. Student debt relief for ITT students is part of a collaborative effort that has totaled $ 1.5 billion in federal borrower defense loans to date.
“Our action today will give thousands of borrowers the fresh start and the relief they deserve after ITT has lied to them repeatedly,” Cardona said in a statement.
However you view the merits of for-profit colleges, it is clear that ITT recruited students out of misinformation and then provided them with inferior education. In addition to the Securities and Exchange Commission’s fraud allegations, which were settled in 2017, ITT has faced investigations by more than a dozen attorneys-general into its marketing and recruiting tactics, as well as its head-scratching job placement claims. A 2017 lawsuit filed against ITT contained 109 pages of heartbreaking stories from former students.
The Department of Education says it is providing debt relief to students who have shown ITT to mislead them about their job prospects and ability to transfer loans to other higher education institutions.
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The Department of Education noted that “ITT has repeatedly and seriously misrepresented students about the income they could expect and the jobs they could get after graduation between 2005 and the facility’s closure in 2016,” the agency said in a statement. In addition, “loans were rarely carried over and borrowers made little or no progress in their education, but were burdened with student loan debt due to their time at ITT”.
Unfortunately, the scale of the problem and the need for help almost certainly exceeds the 18,000 people who are receiving help now. While the Obama administration may have had good intentions in its serious actions against ITT – including threats to remove ITT’s accreditation agency – those actions left many former students hanging up to dry during a presidency that had a more positive attitude for-profit universities.
In a way, the Education Department’s announcement will have the same effect as the Obama administration’s actions. It sends a signal that help is on the way. But soon the vast majority of former ITT students will learn that help is not coming for them, at least not yet. When that happens, you will have some questions.
Hopefully, unlike the Obama and Trump administrations, Biden’s Department of Education will have better answers for the rest of the students who have been harmed by ITT.
Contact IndyStar Metro columnist James Briggs at 317-444-6307. Follow him on Twitter: @JamesEBriggs.
source https://collegeeducationnewsllc.com/itt-tech-students-finally-getting-loans-canceled-after-school-collapse/
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