AG Balderas calls on US Department of Education to cancel ITT Tech student loans

Santa Fe, NM – Attorney General Balderas today called on the US Department of Education to write off the federal student loan debt of those who attended the ITT Technical Institute. Here is a statement from the GA office:

The now-defunct for-profit school defrauded thousands of people into enrolling and borrowing loans based on false and misleading information about the value of an ITT degree and empty promises well-paying jobs after graduation. The borrower’s defense demand that a bipartisan coalition of 24 states and the District of Columbia filed today includes students who attended ITT Tech between at least 2007 and 2011, when these deceptive tactics were used to convince students to attend school and borrow federal student aid. This widespread and pervasive misrepresentation has violated national consumer protection laws. Federal law allows the Department of Education to cancel federal student loans when borrowers have been deceived into obtaining loans. Attorneys General are calling for complete relief from ITT students, including repayment of money students have already paid on these loans.

“Students who are trying to achieve the American dream and improve the lives of their families should not be taken advantage of by for-profit schools and end up in heavy debt,” Attorney General Balderas said. “My office will continue to fight on behalf of students and families to ensure their safety and their opportunities for prosperity.”

Based on a Congress Report 2012, ITT enrolled approximately 282,000 students across the country between 2007 and 2010. During this enrollment period, ITT showed a document, “Value Proposition for Employed Graduates,” to potential students to convince them to enroll. and, in most cases, to borrow thousands of dollars in federal student aid. Analysis of the value proposition graph (Figure 1 of the document) revealed that ITT distorted the value of its education, claiming that it would be substantial, and that enrolled students would get well-paying jobs after graduation. of their degree with a constant earnings growth rate. . ITT’s value proposition graph shows a projected annual salary over an estimated working life, distorting the projected annual earnings of ITT graduates to $ 100,000 more than the average earnings of workers with the same credentials.

Dr Jordan Matsudaira, associate professor of economics and educational policy at Columbia University, analyzed and assessed the accuracy of this graph and ITT’s claims. Matsudaira found that ITT massively overestimated the financial gains borrowers could reasonably expect from an ITT program.

Attorney General Balderas joined in the letter to the Attorneys General of Colorado, Connecticut, District of Columbia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, from Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, Washington and Wisconsin.