The Education Department said Tuesday that it will discharge all remaining federal student loan debt for students who attended the former for-profit school ITT Technical Institute, giving some 208,000 people nearly $3.9 billion in relief.

Eligible borrowers will have their loans discharged automatically if they attended ITT Tech from January 1, 2005, through its closure in September 2016, the department said in a release.

What You Need To Know

  • The Education Department said Tuesday that it will discharge $3.9 billion in federal student loan debt for 208,000 students who attended the former for-profit school ITT Technical Institute

  • The institution, which at its peak was one of the biggest for-profit college chains in the U.S., was accused of misleading students about its academic programs and aggressively pushing students into risky loans

  • All told, the Biden administration has approved nearly $32 billion in student debt for 1.6 million borrowers since President Joe Biden took office in Jan. 2021

  • The move comes amid questions about whether or not President Biden will take additional action in the coming weeks to address student debt on a wider scale

The institution, which at its peak was one of the biggest for-profit college chains in the U.S., was accused of misleading students about its academic programs and aggressively pushing students into risky loans. In 2016, following a number of state and federal probes and sanctions from the Education Department, the school declared bankruptcy and abruptly shut down all of its locations nationwide.

“It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises,” Cardona said in a statement on Tuesday.

“The evidence shows that for years, ITT intentionally misled students about the quality of their programs in order to profit off federal student loan programs with no regard for the hardship this would cause," the Education Secretary continued.

The Consumer Financial Protection Bureau also cheered the administration's effort, writing in a statement: “Far too many Americans are still on the hook for loans they acquired at colleges that profited from deceiving students, and the CFPB will continue to work with the Department of Education to address predatory student loan debt, protect students, and to hold wrongdoers accountable."

The agency sued ITT Tech in 2014, alleging that the institution "pressured its students into taking out high-cost loans" despite their inability to repay. In 2020, the CFPB, 47 states and the District of Columbia reached a $330 million settlement with ITT Tech and its holding company.

All told, the Biden administration has approved nearly $32 billion in student debt for 1.6 million borrowers since President Joe Biden took office in Jan. 2021, the agency said in a statement. 

The move comes amid questions about whether or not President Biden will take additional action in the coming weeks to address student debt on a wider scale. He supported canceling up to $10,000 in student debt per borrower on the campaign trail, and said as recently as April that he is "taking a hard look" at canceling additional debt.

"I am considering dealing with some debt reduction," Biden told reporters, though indicated he would not go as far as to cancel $50,000 in debt per borrower, which advocates, including members of his own party, have urged him to do.

I am not considering $50,000 debt reduction," Biden said at the time. "I'm in the process of taking a hard look at whether or not ... there will be additional debt forgiveness, and I'll have an answer on that in the next couple of weeks."

Biden has previously said that he's unsure he can cancel that much debt without Congressional approval. The White House extended a pause on student loan repayments, implemented under his predecessor Donald Trump during the COVID-19 pandemic, through Aug. 31.

The Education Department said it also notified DeVry University that their institution is required to pay $24 million "for approved borrower defense applications," an application for students seeking loan forgiveness if they have been defrauded by their schools or their school closed before they could complete their degree. 

“ITT defrauded hundreds of thousands of students, as we identified when I was the director of the Consumer Financial Protection Bureau,” Federal Student Aid Chief Richard Cordray, said in a statement. "By delivering the loan relief students deserve, we are giving them the opportunity to resume their educational journey without the unfair burden of student debt they are carrying from a dishonest institution."

Cardona pledged protections for student borrowers from preparatory lenders in the future. 

"The Biden-Harris Administration will continue to stand up for borrowers who’ve been cheated," he said, adding that his agency will work to strengthen oversight and enforcement to protections for "today’s students from similar deception and abuse.”