- Office of Attorney General Maura Healey
Media Contact for AG Healey Joins States in Urging U.S. Department of Education to Forgive Loans of Certain ITT Tech Students
BOSTON — Attorney General Maura Healey today urged the U.S. Department of Education to cancel the federal student loan debt of certain students who attended ITT Technical Institute (“ITT Tech”). The now defunct for-profit school defrauded thousands of individuals by encouraging them to enroll and take out loans based on false and misleading information about the value of an ITT Tech degree and empty promises of high-paying jobs after graduation.
The borrower defense application submitted today by a bipartisan coalition of 24 states and the District of Columbia requests federal loan discharges for students who enrolled at ITT Tech between 2007 and 2010, a period in which the school regularly used a deceptive chart concerning future potential earnings to convince students to attend and borrow federal student aid. ITT Tech’s widespread and pervasive misrepresentation concerning job prospects and future potential earnings violated state consumer protection laws.
Federal law permits the U.S. Department of Education to forgive federal student loans when borrowers are deceived by schools. The attorneys general are demanding full relief for ITT Tech students, including refunds of their loan payments.
“ITT Tech induced students to enroll in its costly programs based on deceptive earnings prospects, leaving students and their families with crushing debts they can’t afford to pay,” said AG Healey. “Borrowers across the country were swindled by this school and deserve relief. We call on the Department of Education to cancel their loans, so they no longer have to shoulder this unfair debt burden.”
Based on a 2012 congressional report, ITT Tech enrolled roughly 282,000 students across the country between 2007 and 2010. During this period, the school regularly showed prospective students a document entitled “Value Proposition for Employed Graduates,” in an effort to persuade students that the value of an ITT Tech education was worth its high cost, and that students should take out tens of thousands of dollars in loans to attend.
However, an analysis of the “Value Proposition” chart (Figure 1) revealed that ITT Tech misrepresented the value of its education, claiming it would be substantial, and that its students would get high-paying jobs upon graduation with a constant rate of earning growth. ITT Tech’s Value Proposition chart showed a projected annual salary over an estimated work life, misrepresenting the projected annual earnings for ITT graduates at $100,000 more than the average earnings of workers with the same credentials.
In addition to Massachusetts, the application is signed by the Attorneys General of Colorado, Connecticut, Oregon, the District of Columbia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Minnesota, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Tennessee, Vermont, Virginia, Washington, and Wisconsin.
Handling the matter for Massachusetts is Assistant Attorney General Diana Hooley of AG Healey’s Insurance & Financial Services Division.