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Attorney General William Tong

11/14/2019

ATTORNEY GENERAL TONG CALLS ON THE U.S. DEPARTMENT OF EDUCATION TO CANCEL LOANS FOR FORMER ITT TECH STUDENTS

Multistate Letter Asks Department to Ensure that the Federal Loans of Students who Attended the School When it Closed are Forgiven

Attorney General William Tong today joined a multistate effort calling on the U.S. Department of Education to immediately forgive the loans of former ITT Tech students who attended the bankrupt for-profit school when it closed.

The letter, joined by a total of 22 attorneys general, was sent to Federal Student Aid Chief Operating Officer Mark Brown and questions whether the Department has complied with federal regulations that require the Department to automatically discharge the loans of borrowers who were enrolled at closed schools and who do not continue their education elsewhere.

"Students in many states across the country enrolled into ITT Tech seeking a quality education, but instead are now saddled with debt and have been deprived of an opportunity to earn a diploma and pursue prospective career paths. The U.S. Department of Education has an obligation to review and approve financial relief for the countless students who were defrauded by ITT Tech," said Attorney General Tong.

The attorneys general note that in May 2019, the Department estimated that approximately 52,000 former ITT students are eligible for nearly $833 million in closed-school discharge relief. Recent information obtained from Congress, however, indicates that automatic closed-school discharges have only been granted to approximately 7,000 former ITT student borrowers — amounting to less than $95 million in relief.

Today’s letter calls on the Department to clarify whether all eligible ITT students are now receiving the automatic discharges to which they are entitled.

Federal law requires the Department to automatically forgive the student loans of eligible students within 120 days of a school’s closure if the student did not obtain a degree and has not transferred credits into the same program at another school.

The attorneys general have asked that the 120-day window be expanded “due to the deeply compromised nature of the school and its offerings in the months before its national collapse.”

The letter also asks for details about the number of students whose loans were discharged and the methodology the Department is using to implement the automatic closed school discharge.

Today’s letter is being led by Massachusetts Attorney General Maura Healey, Kentucky Attorney General Andy Beshear and Oregon Attorney General Ellen Rosenblum, and is joined by the attorneys general of California, Colorado, Delaware, Illinois, Iowa, Maine, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Vermont, Virginia, and Washington.

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