Press Release  AG Healey Calls on U.S. Department of Education to Cancel Loans of Former ITT Tech Students

Boston — Massachusetts Attorney General Maura Healey today led 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 enrolled at closed schools who do not continue their education elsewhere.

“When ITT abruptly shut its doors, its students were left with no diploma, no job prospects, and significant debt,” AG Healey said. “We are calling on the Department to do its job and give these students the relief they are entitled to.”

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. However, recent information obtained from Congress indicates that automatic closed-school discharges have only been granted to over 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 students attending within 120 days of a school’s closure for students who did not obtain their degree and have 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 AG’s 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 AG Healey, Kentucky Attorney General Andy Beshear and Oregon Attorney General Ellen Rosenblum, and has been joined by the attorneys general of California, Colorado, Connecticut, Delaware, Illinois, Iowa, Maine, Michigan, Minnesota, Mississippi, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Vermont, Virginia, and Washington.

AG Healey has established herself as a national leader on behalf of distressed student borrowers, committed to challenging the callous and illegal policies of Secretary DeVos and the U.S. Department of Education. Today’s letter follows a successful multistate effort led by AG Healey to save critical student loan protections. In October 2018, a federal judge rejected a challenge to the Borrower Defense Rule, ordering its immediate implementation for students nationwide. This implementation resulted in approximately $381 million in automatic loan discharges for students whose schools closed on or after November 1, 2013.

Massachusetts borrowers who are looking for student loan help or information should visit the AG’s Student Loan Assistance page or call the Student Loan Assistance Unit Hotline at 1-888-830-6277.

This matter is being handled by Assistant Attorney General Diana Hooley of the AG’s Insurance and Financial Services Division, Arwen Thoman, Deputy Director of the Insurance and Financial Services Division and head of the AG’s Student Loan Assistance Unit, and Assistant Attorney General Yael Shavit of the AG’s Consumer Protection Division.

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