AG James Calls On Department Of Education To Cancel Loans Of Former ITT Tech Students

AG James Calls on Department of Education to
Cancel Loans of Former ITT Tech Students

Coalition of 22 AGs Sends Multistate Letter Asking for
Hundreds of Millions in Loans to Former ITT Students Be Forgiven

NEW YORK – New York Attorney General Letitia James today joined a multistate effort calling on the U.S. Department of Education to immediately forgive the loans of former ITT Tech students who attended the bankrupt for-profit school when it closed. The letter, joined by a total of 22 attorneys general, was sent to Federal Student Aid Chief Operating Officer Mark Brown and questions whether the Department of Education has complied with federal regulations that require it to automatically discharge the loans of borrowers enrolled at closed schools who do not continue their education elsewhere.

“The Department of Education’s neglect has saddled students across the country with approximately half a billion dollars in additional student loan debt,” said Attorney General James. “Unfortunately, school closures often leave students worse off than when they enrolled — stuck with debt, no diploma, and without enhanced career prospects. For these borrowers and their families, discharge of federal loans is extremely important, which is why I am committed to ensuring that all eligible ITT students receive the closed-school discharge relief they deserve.”

In their letter, the coalition of attorneys general note that in May 2019, the Department of Education estimated that approximately 52,000 former ITT students were eligible for nearly $833 million in closed-school discharge relief. However, recent information obtained from Congress indicates that automatic closed-school discharges have only been granted to approximately 7,000 former ITT student borrowers — amounting to less than $95 million in relief and leaving tens of thousands of former ITT students who owe hundreds of millions in student loans in the lurch. Today’s letter calls on the Department of Education to clarify whether all eligible ITT students are now receiving the automatic discharges to which they are entitled.

Federal law requires the Department of Education to automatically forgive the student loans of students attending within 120 days of a school’s closure for students who did not obtain their degree and have not transferred credits into the same program at another school. The attorneys general have specifically asked that the 120-day window be expanded “due to the deeply compromised nature of the school and its offerings in the months before its national collapse.”

The letter also asks for details about the number of students whose loans were discharged and the methodology the Department of Education used to implement the automatic closed school discharge.

In June, Attorney General James obtained an agreement to provide $2.58 million in debt relief to 288 former ITT Tech students in New York. The agreement was made with Student CU Connect CUSO, LLC, which was created for the sole purpose of providing private student loans to students at ITT — the now defunct for-profit college.

ITT filed for bankruptcy in 2016 and had 149 campuses across the country. The three ITT campuses in New York were in Albany, Liverpool, and Getzville.

Joining Attorney General James in sending today's letter are the attorneys general of California, Colorado, Connecticut, Delaware, Illinois, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Vermont, Virginia, and Washington.