The Education Department has said that it will forgive the federal loans of students who attended ITT Technical Institute but left after March 2008 without completing a degree. This forgiveness will apply to 115,000 borrowers amounting to more than $1 billion in debt. ITT, a for-profit chain accused of fraudulently luring in students with inflated claims about the earnings and career prospects of its graduates, went bankrupt in 2016. This means the cost of eliminating this debt will largely fall on taxpayers.
Loan forgiveness for ITT students has already been offered in the past, but this announcement means that many more borrowers will now be eligible. March 2008 was chosen as the cut off for eligibility because that is the period that the Education Department determined ITT’s executives schemed to disguise the company’s true financial condition, which drove up costs for students while reducing the quality of the education that they received.
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