Biden has canceled over $9 billion in student loan debt

Source: The Hill | August 30, 2021 | Aris Folley

The Department of Education has canceled more than $9 billion in student loan debt since President Biden has come into office with moves that will affect more than 563,000 borrowers.

The agency confirmed the new top-line figure upon its recent announcement detailing its cancellation of $1.1 billion in debt for 115,000 borrowers that attended ITT Technical Institute, which is now defunct. 

The department said borrowers receiving relief attended ITT during a period in which the institution misrepresented its finances and misled students about “unaffordable private loans that were allegedly portrayed as grant aid.”

“ITT’s malfeasance drove its financial resources away from educating students in order to keep the school in business for years longer than it likely would otherwise have, resulting in debts that are being discharged starting today,” the agency said. 

Education Secretary Miguel Cardona said ITT, which closed permanently in 2016, “hid its true financial state from borrowers” for years “while luring many of them into taking out private loans with misleading and unaffordable terms that may have caused borrowers to leave school.”

Cardona extended the window for relief to March 31, 2008, after a review by the agency into events that led to the closure of the institution, as well as filings with the Securities and Exchange Commission and the company’s bankruptcy court proceedings.

The agency said the date marks when the company’s leaders “publicly disclosed the start of a financial scheme that kicked off a series of misrepresentations to hide the true nature of the school’s finances following a public loss of outside financing.” 

The office said it is providing automatic relief to eligible borrowers who attended any institution that shut down between November 1, 2013, and July 1, 2020, and did not enroll in another institution within three years of the school’s closure.

Previously, borrowers that were students at ITT in its final four months of operation received automatic relief in 2019.

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