Attorney General James Urges Department of Education to Forgive Loans of Defrauded ITT Tech Students
NEW YORK – New York Attorney General James, as part of a bipartisan coalition of 25 attorneys general, today urged the U.S. Department of Education to cancel federal student loan debt of defrauded ITT Technical Institute (ITT Tech) students. The now defunct for-profit school lured students with deceptive claims about the value of an ITT degree and empty promises of high-paying jobs after graduation. The coalition of attorneys general today submitted an application to the Department of Education for federal loan discharges for students who attended ITT Tech between 2007 and 2010, when these deceptive tactics were used to convince students to attend the school and borrow federal student aid. Federal law permits the Department of Education to forgive federal student loans when borrowers were deceived in obtaining loans. The attorneys general are demanding full relief for ITT students, including refunds of the money students already paid on those loans.
“ITT lied to and exploited students who were simply trying to further their education with false promises of high-paying jobs,” said Attorney General James. “But all this sham school provided was an education in how to defraud honest, hard-working students. Students should not be on the hook for debt that resulted from ITT’s lies, which is why our coalition is calling for the Department of Education to wipe the slate clean for these students. They shouldn’t have to pay off years of debt on something they never received.”
Between 2007 and 2010, ITT made misrepresentations to prospective students concerning ITT graduates’ salary outcomes in an effort to lure them into enrolling and borrowing thousands of dollars in federal student aid. ITT, specifically, even provided prospective students with a chart showing a projected annual salary over an estimated work life, which overstated the projected annual earnings for ITT graduates by more than $100,000.
ITT eventually closed its doors in 2016.
Today’s action to support former ITT students follows Attorney General James’ multistate agreements with loan companies Student CU Connect CUSO in June 2019 and PEAKS in September 2020 — two companies that preyed on ITT students by deceiving them into taking out private student loans. These agreements resulted in $7.5 million in debt relief to nearly 900 New York ITT students.
Just yesterday, Attorney General James urged Secretary of Education Dr. Miguel Cardona to make additional reforms to ease the process of paying student loans, as well as to protect student loan borrowers from paying back debt to for-profit and now defunct colleges.
Attorney General James has also been actively working to protect student loan borrowers. In July 2020, Attorney General James and a multistate coalition sued the Trump Administration’s Department of Education and former Education Secretary Betsy DeVos to block their efforts to repeal critical protections for student-borrowers who have been misled or defrauded by predatory for-profit schools.
Additionally, in June 2020, Attorney General James filed a multistate lawsuit to stop the Department of Education and former Secretary DeVos from repealing the “Gainful Employment” rule, which provides critical protections to students considering enrolling in for-profit colleges and vocational schools that promise students “gainful employment in a recognized occupation” after graduation.
Joining Attorney General James in submitting today’s application to the Department of Education were the attorneys general of Connecticut, Colorado, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia.