California Attorney General Calls For Loan Remission For Former ITT Tech Students

California Attorney General Xavier Becerra joined 21 state attorneys general on Wednesday in demanding the immediate cancellation of the loan for former ITT Technical Institute students, who they said were swindled by the for-profit school.

In one letter to the chief operating officer of federal student aid at the US Department of Education, Becerra and the other attorneys general asked for information on the state of student loan relief for those who attended ITT Tech, which filed for bankruptcy in 2016.

Federal law requires the Department of Education to automatically cancel federal loans for students whose schools have closed and who did not continue their education elsewhere. The law requires such action to occur within 120 days of a school closing.

The California attorney general’s office said more than 52,000 former ITT Tech students are eligible for nearly $ 833 million in closed schools loan forgiveness, but, as of May 16, only a third had applied individually. and received relief.

“Unfortunately, school closures often leave students worse off than when they enrolled – with debt, no diploma and no improved career prospects,” the letter said. “For these borrowers and their families, the release of federal loans is extremely important.”

ITT Tech closed in 2016 amid federal sanctions and a flurry of controversy over its recruiting methods, the quality of its programs, and its heavy reliance on federal student loans. The abrupt shutdown left tens of thousands of students in debt, many of whom lacked transferable credits to continue their education.

At the time, data from federal colleges indicated that the majority of students at ITT Tech, which had two campuses in San Diego County and some 140 nationwide, had not completed their education at all.

About 36 percent of students completed their programs within six years, according to the data.

At least 80 percent of ITT students have taken out federal loans and over 60 percent have defaulted within three years of leaving school.

According to the letter, US Senator Richard Durbin (D-IL) announced in September that the Education Department was granting closed school discharges to some 7,000 former ITT Tech borrowers – amounting to nearly 95%. million dollars in aid – but states were unable to confirm with the ministry.

In the letter, the attorneys general ask the Department of Education to provide, among other things, clarification on whether all eligible ITT Tech students are now receiving borrower relief or whether some students have been excluded from wrong of the program. They asked for details of the ministry’s decision-making process on whether to extend eligibility beyond 120 days.

And they looked for data on borrowers who requested releases, including whether they were granted, denied, or found ineligible for releases.

Becerra, in a statement Wednesday, said Education Secretary Betsy DeVos had continuously blocked aid for the defrauded students.

“Secretary DeVos has a catastrophic record when it comes to providing students with the help they need,” Becerra said. “Today we demand answers. Secretary DeVos and the Department of Education must review and approve the relief for students defrauded by ITT Tech. “

DeVos and his department have come under pressure in recent months, as lawmakers and courts accuse officials of stopping or delaying student debt relief programs, which DeVos previously called ‘free money’ gifts .

In October, a federal judge in San Francisco convicted DeVos in contempt of court for illegally collecting loans owed by students attending Corinthian Colleges, another for-profit chain that collapsed in 2014.

Another federal judge has certified a class action lawsuit that accuses DeVos and the department of blocking requests from more than 160,000 borrowers to cancel loans from for-profit college chains, including Corinthian and ITT Tech.

In addition to Becerra, the attorneys general of Massachusetts, Kentucky, Oregon, Colorado, Connecticut, Delaware, Illinois, Iowa, Maine, Michigan, Minnesota, Mississippi, Nevada , New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Vermont, Virginia, and Washington signed the note in what it calls a bipartisan coalition.

They asked the department to respond within 30 days.

Becerra has always sought redress for defrauded students. In December 2017, his office filed a lawsuit against the Department of Education and DeVos for refusing to process debt relief requests submitted by tens of thousands of students who borrowed to attend Corinthian. The courts found that the for-profit chain defrauded the students in violation of California consumer protection laws and that the students had become eligible to seek redress.

That same year, Becerra’s office sued Ashford University and its parent company, Bridgepoint Education, for illegal activities against its students. The trial is pending in San Diego Superior Court.

California students seeking one-on-one assistance following the closure or illegal activities of their private colleges should contact California Student Aid and Rescue Office. The office also helps students identify, obtain, complete, and submit financial aid documents.

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