NEW YORK – New York Attorney General Letitia James, as part of a bipartisan coalition of 24 state attorneys general, is urging the U.S. Department of Education to cancel federal student loan debt of defrauded ITT Technical Institute (ITT Tech) students.
Loans to students at ITT Tech have been a sore point for some credit unions, seven of which were agreed in 2019 to pay more than $7 million to bring what was a painful ordeal to a close, after having earlier suffered more than $150-million in losses related to loans to former ITT Tech students.
While those credit unions have looked to put ITT Tech behind them, James and the other state AGs say many former students continue to suffer.
“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 New York AG’s office stated. “The coalition of attorneys general 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.”
Full Relief Demanded
The attorneys general noted federal law permits the Department of Education to forgive federal student loans when borrowers were deceived in obtaining loans. The AGs 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 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.”
The attorneys general are alleging that 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, the AG’s said.
ITT eventually closed its doors in 2016.
Earlier Agreements
The AG’s office noted the new action to support former ITT students follows 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, the AG’s office noted.