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Student loans forgiven for 300 defrauded CT students

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QUINN DOMBROWSKI
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The debt relief for ITT Tech students comes as borrowers await President Joe Biden’s decision whether to extend the pause on student loan repayments.

The Biden administration has canceled student loan debt for former students who attended a now shuttered for-profit college, a decision that will provide 300 people in Connecticut with a total of $5 million in relief.

Secretary of Education Miguel Cardona made the announcement on Monday as millions of borrowers across the U.S. await President Joe Biden’s imminent and wide-ranging decision on possibly forgiving tens of thousands of dollars in student loan debt and whether those loan repayments will resume on Sept. 1.

Connecticut Attorney General William Tong said he was one of 25 attorneys general who filed a borrower defense application urging the Education Department to forgive the debt of those who attended ITT Tech, citing “deceptive tactics” used by the school to recruit students.

The federal decision covers borrowers who attended ITT Tech from Jan. 1, 2005 until the school shut down in September 2016. It also includes those who were enrolled in the school but haven’t submitted a borrower defense, which allows them to ask for a loan discharge if they’ve been defrauded. The Education Department had previously discharged loans for 130,000 ITT Tech borrowers.

“Today’s action will provide billions of dollars in relief — including $5 million to 300 borrowers in Connecticut,” Tong said in a statement. “Secretary Cardona has been an aggressive leader in providing relief to students and holding predatory institutions accountable.”

Beyond Connecticut, Cardona said 208,000 borrowers across the country will get loan discharges of $3.9 billion. He said there’s evidence that ITT Tech “engaged in widespread and pervasive misrepresentations related to the ability of students to get a job or transfer credits” as well as lying about the accreditation of the associate degree in nursing.

“The evidence shows that for years, ITT’s leaders 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,” said Cardona, who was the commissioner of Connecticut’s education department before his appointment to serve in Biden’s Cabinet.

To date, the Biden administration has approved nearly $32 billion in student debt loan relief for about 1.6 million people. In addition to the news about ITT Tech, Cardona said his agency formally notified DeVry University that it must pay millions of dollars for approved borrower defense applications. He also approved the discharge of loans for those enrolled in a program at Kaplan Career Institute’s location in Massachusetts from about a decade ago.

But students in Connecticut and around the country are waiting for Biden’s highly anticipated announcement on student loan debt in a matter of days.

He’s reportedly eyeing a cancellation of about $10,000 in student loan debt for borrowers who earn under $150,000, though it’s possible he’ll go with a different amount — or none at all. It’s one of Biden’s promises from the 2020 presidential campaign, though advocates are pushing for a much higher amount of up to $50,000 per borrower.

The president is also expected to decide soon whether to grant another pause of student loan repayments and interest accrual, which are scheduled to lift at the end of the month. Biden directed the Education Department to freeze repayments when he took office in early 2021 but extended it a few times because of the economic hardships caused by COVID-19.

Those announcements will come less than three months out from the midterm elections, which could have a profound impact on how Biden governs and what he could pass for the remaining two years of his current term.

Lisa Hagen is the federal policy reporter in a collaboration between Connecticut Public and The Connecticut Mirror. Hagen is based in Washington, D.C., and produces stories that examine the impact of federal policy on Connecticut.