Biden administration cancels $500m in student loan debt for 18,000 students defrauded by college

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The Biden administration announced Thursday that thousands of students who were defrauded by the for-profit ITT Tech college before it was shuttered in 2017 will have their student loans forgiven in their entirety.

The announcement Thursday is a reversal from a policy pursued by the Department of Education under Betsy DeVos, the secretary installed by former President Donald Trump, who decided that students defrauded by for-profit colleges would only see loans partially forgiven.

CNN reported the announcement on Thursday morning. The Independent has reached out to the department for more information.

The decision will affect roughly 18,000 former students of the Indiana-based corporation, which boasted campuses around the country. Many current students of the school found themselves with a mountain of debt and non-transferrable credits when the school shuttered.

ITT Tech, founded in 1969, came under a mountain of controversy throughout the late 1990s and 2000s after students alleged that school officials lied to them about whether ITT Tech credits could be transferred to other schools. The company was also under investigation by both federal and numerous state authorities for various reasons including allegedly coercing students to take on predatory loans and widespread grade inflation.

"Many of these borrowers have waited a long time for relief, and we need to work swiftly to render decisions for those whose claims are still pending," said Education Secretary Miguel Cardona, according to CNN.

The Biden administration’s actions to work through a massive backlog of student loan forgiveness claims comes as the president has faced pressure for months from his party’s left flank as well as establishment figures including Senate Majority Leader Chuck Schumer to take serious action and cancel large portions if not all of America’s outstanding student loan debt.

Proponents of such an idea have argued that it would serve as a direct form of economic stimulus for millions while also encouraging more Americans to seek higher education.