Twenty million borrowers are affected by the Biden administration’s sweeping student debt forgiveness plan announced in August 2022 – primarily canceling $10,000 of loan debt for any borrowers who made less than $125,000 per year (or $250,000 per household).
Attendees of the defunc ITT Tech who unknowingly took out “misleading” loans that the for-profit college chain allegedly disguised as grant money. ITT also mischaracterized future job options and students’ ability to transfer credits.
In reality, many students said it was harder to find employment when they listed ITT on their resumes, the department said.Credits were rarely accepted elsewhere, the department said, leaving students with "little to no progress" in their academic careers.
In 2017, former students filed a class action lawsuit to assert their claims in these proceedings. In February 2022, the bankruptcy court approved a plan to distribute some of the money from ITT's bankruptcy estate to former students. Under the terms of the distribution, Class Members can receive a cash payment $10 to $100.
Borrowers will be notified about their claim approvals in the coming weeks, the agency said.
The group also includes around 200,000 former college students who reached a settlement with their schools over fraud claims, more than half a million defrauded former students who took out loans to attend the Corinthian chain of schools — as well as some 66,000 borrowers who will get automatic loan forgiveness from a settlement reached in early 2022 with the loan servicing company Navient.
It follows another round of loan discharges in March, when the Education Department cleared $1 billion in federal student debt for 72,000 borrowers. Those claims all came from former students of for-profit colleges.