18,000 People Granted Student Loan Relief Amounting to More Than $500 Million

The U.S. Department of Education said Wednesday it will forgive student loan debt for 18,000 former students of ITT Technical Institute, a for-profit college chain that closed under the Obama administration, the Associated Press reported.

The Biden administration approved the clearance of more than $500 million in debt. The Education Department said ITT Tech made "repeated and significant misrepresentations" about its ability to help students get jobs and misled students about its ability to transfer course credit to other colleges.

In reality, students said it was more difficult to find employment with ITT Tech on their resume and that credits were rarely accepted at other institutions.

"Our action today will give thousands of borrowers a fresh start and the relief they deserve," Education Secretary Miguel Cardona said in a statement. "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."

For more reporting from the Associated Press, see below.

Student Debt Forgiveness
The U.S. Department of Education said Wednesday it will forgive student loan debt for 18,000 former students of ITT Technical Institute, a for-profit college chain that closed under the Obama administration. Above, Senate Majority Leader Chuck Schumer (D-N.Y.) speaks during a press conference about student debt outside the U.S. Capitol on February 4, 2021, in Washington, D.C. Drew Angerer/Getty Images

The move marks a step forward in the Biden administration's effort to clear a backlog of claims in the borrower defense program, which provides loan forgiveness to students who were defrauded by their colleges.

Claims piled up during the Trump administration, which stalled the program and only started processing claims after a federal court demanded it. There are now more than 100,000 pending claims.

It follows another round of loan discharges in March, when the Education Department cleared $1 billion in federal student debt for 72,000 borrowers. Those claims all came from former students of for-profit colleges.

Borrower defense is among several education programs targeted for an overhaul by the Biden administration as it works to reverse Trump-era policies. Cardona is hosting a series of hearings this month as his agency considers changes to that policy and others.

The program was rarely used until 2015, when the Education Department received thousands of claims from former students of Corinthian Colleges. The chain of for-profit colleges had recently shut down following findings that it lied to students about job placement rates.

Following the collapse of Corinthian and other beleaguered for-profit colleges, the Obama administration moved to make it easier for students to get loans erased. But the overhaul was reversed by the Trump administration, which later wrote its own rules making it tougher to get relief. In changing the rules, then-Education Secretary Betsy DeVos said it had become too easy to get loans forgiven.

Cardona began chipping away at DeVos' rules in March when he rescinded a formula that allowed the Education Department to give only partial loan discharges to students whose claims were approved. All borrowers granted relief will now get their loans cleared in full.

Borrowers will be notified about their claim approvals in the coming weeks, the agency said.

Student Debt Relief
Students find the doors locked to the ITT Technical Institute campus in Rancho Cordova, California. The U.S. Education Department says it's erasing student debt for thousands of borrowers who attended the for-profit college chain that made exaggerated claims about its graduates' success in finding jobs. The Biden administration is approving 18,000 loan forgiveness claims from former students of ITT Tech, a chain that closed in 2016. Rich Pedroncelli/AP Photo