More than 200,000 students who attended classes at ITT Technical Institute will see their student loan debt erased under plans announced by the Department of Education on Tuesday, but the move won’t restore GI Bill benefits for veterans defrauded by the school.
Advocates say that omission is a disappointing footnote in an otherwise important decision to help students victimized by the school.
“These students deserve to have their student loans canceled after having been so misled about the education at ITT, the transferability of credits, and employment after graduation,” said Della Justice, vice president of legal affairs at Veterans Education Success. “But it is a total shame that veterans who were cheated out of their GI Bill benefits will not get their GI Bill back.”
Education officials said the move to dismiss all remaining federal student debt related to ITT loans will provide about $3.9 billion in financial relief to individuals across the country.
The loan forgiveness applies to students who attended classes from January 2005 to September 2016. The for-profit school had an annual enrollment of more than 40,000 and about 130 campuses across the country at one point, but was forced into bankruptcy after regulators blocked students from using federal loans to attend classes there in 2016.
“It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises,” Education Secretary Miguel Cardona said in a statement.
“The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs in order to profit off federal student loan programs, with no regard for the hardship this would cause.”
Federal officials penalized ITT Tech leadership for making false claims about graduates’ ability to find jobs and students’ ability to transfer education credits to other schools.
For veterans who used personal loans to pursue degree programs at the school, Tuesday’s announcement means an immediate windfall.
Tasha Berkhalter, an Army veteran who spoke at the Department of Education’s announcement, said she accumulated nearly $100,000 in student loan debt because of shortfalls in her GI Bill benefits with ITT’s tuition policies. Veterans like her will now get that money back.
But others who lost tens of thousands of dollars in GI Bill benefits for worthless degrees won’t see similar payouts. Congress did pass legislation in 2017 allowing some students to have those education benefits restored when schools abruptly close, but the measure is only retroactive to 2015.
Nearly 12,500 students used the GI Bill at ITT in 2015 alone, according to research from Student Veterans of America. Tens of thousands more used their GI Bill benefits at the school in earlier years.
Veterans Education Success officials said members of Congress have discussed restoring GI Bill benefits for more students victimized by poorly-run schools, but no new action is imminent.
Department of Education officials said students with lingering federal debts related to ITT will not have to apply for the loan forgiveness. The debts should be automatically erased from their records in coming weeks.
Additional information on the debt decision is available on the Department of Education’s web site.
Leo covers Congress, Veterans Affairs and the White House for Military Times. He has covered Washington, D.C. since 2004, focusing on military personnel and veterans policies. His work has earned numerous honors, including a 2009 Polk award, a 2010 National Headliner Award, the IAVA Leadership in Journalism award and the VFW News Media award.