The Department of Ed approved $500 million of student debt relief

On Wednesday, the Department of Education announced that it had approved cancellation of approximately $ 500 million federal student loans held by 18,000 borrowers who attended the ITT Technical Institute. The borrowers will have 100% of their loans canceled.

“Our action today will give thousands of borrowers the fresh start and the relief they deserve after ITT repeatedly lied to them,” Education Minister Miguel Cardona said in a statement. “Today’s action is part of the Biden Harris Administration’s ongoing commitment to advocate for borrowers when their institutions take advantage of them. Many of these borrowers have long waited for relief and we must work quickly to make decisions for those whose lawsuits are pending. This work also underscores the need for ongoing accountability so that institutions will never again be able to commit this widespread deception. “

While the Department of Education previously approved student loan relief for students defrauded by for-profit entities (including ITT), the news marks the first time the Department of Education has approved relief on the grounds that ITT has given students about their career prospects and theirs Ability to transfer credit points to other schools.

ITT closed in 2016 and in September 2020 48 attorneys general and the Consumer Financial Protection Bureau decided that PEAKS Trust, a private loan program of ITT Tech affiliated with Deutsche Bank companies, must waive the collection of all outstanding educational debts. The ruling resulted in 35,000 former ITT students being waived over $ 330 million in private student loans.

The Ministry of Education stresses that the recent measures are part of a larger effort to provide “targeted credit relief”. In March, the Biden administration announced that around 72,000 borrowers defrauded by their schools will be waived student loans of up to $ 1 billion.

Americans currently owe over $ 1.7 trillion in student loans. House and Senate Democrats have repeatedly urged President Biden to exempt all borrowers from up to $ 50,000 in federal debt by executive order during his first 100 days in office. Such a policy would eliminate student debt for an estimated 93% of borrowers and would largely benefit middle- and lower-wealth borrowers.

Biden’s first 100 days are now behind him, and he has repeatedly resisted the leaders of his own party, stating that he would only support up to $ 10,000 for debt relief and that he would prefer to have the legislation drafted through Congress .

Biden has also asked the Department of Education and Justice Department to create a memo on using executive powers to terminate student loans.

Education Department officials have confirmed to CNBC Make It that they are working on a review of debt relief options and that the department is currently seeking feedback on a variety of related topics.

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