Durbin Statement On Closed School Discharges For Former ITT Tech Students

WASHINGTON – U.S. Senator Dick Durbin (D-IL) today issued the following statement after Secretary of Education Betsy DeVos announced automatic closed school discharges for more than 7,000 former ITT Tech (ITT) student borrowers—amounting to nearly $95 million in relief.  The 2016 Obama-era borrower defense rule requires the Department to automatically grant closed school discharges, without any application, for borrowers who attended a school—such as ITT—that closed on or after November 1, 2013, if the borrower did not subsequently re-enroll in any Title IV institution within three years of the closure.

“Don’t mistake today’s discharges as a sign of empathy for defrauded student borrowers by Education Secretary DeVos.  At the same time she is providing these discharges for ITT borrowers, she is working to eliminate this important relief mechanism for future borrowers by gutting the borrower defense rule.  At every turn, President Trump and Secretary DeVos have placed the greed of the predatory for-profit college industry above America’s students.”

This month, Durbin, along with Senators Elizabeth Warren (D-MA), Richard Blumenthal (D-CT), and Sherrod Brown (D-OH), sent a letter to DeVos calling for automatic closed school discharges for former ITT Tech (ITT) student borrowers.  The 2016 borrower defense rule—which is still in effect despite DeVos’ recently released revised rule eliminating protections for students—provides automatic closed school discharges for borrowers who have not enrolled in another Title IV program of study within three years of their school’s closure.  It’s been more than three years since the closure of ITT.  DeVos’ new rule would eliminate automatic closed school discharge for borrowers whose schools close after July 1, 2020.

Last year, after a federal judge recognized a $1.5 billion claim by students in the bankruptcy proceedings based on the company’s violations of consumer protection laws, the Senators pressed DeVos to provide student loan discharges the students were entitled to.  The settlement also forgave $600 million in private student loan debt owed to ITT and refunded $3 million in student payments previously made to the company.  DeVos has failed to process borrower defense discharges for tens of thousands of defrauded borrowers—including thousands of former ITT students.  

In 2016, ITT collapsed after years of misconduct and misleading students, shuttering 130 campuses and declaring bankruptcy.  Its failure affected nearly 45,000 students, including more than 6,000 veterans – saddling them with high levels of student debt and little hope for repaying it.