Biden Cancels $3.9 Billion of Federal Student Loans for Borrowers Who Attended ITT Technical Institute

On August 16, 2022, President Biden's U.S. Department of Education (Department) announced that it will cancel $3.9 billion of student loan debt for 208,000 borrowers who attended ITT Technical Institute (ITT). The Department said that it will discharge all remaining federal student loans that borrowers received to attend ITT from January 1, 2005, through when the school closed in September 2016.

This discharge includes borrowers who haven't yet applied for a borrower defense to repayment discharge.

So, federal student loans received to attend ITT will be discharged without any additional required action on the borrower's part.

The Department also announced loan discharges for just under 100 borrowers who enrolled in the Medical Assistant or Medical Billing & Coding Program at Kaplan Career Institute's Kenmore Square location in Massachusetts from July 1, 2011 to February 16, 2012.

Since taking over the presidency, President Biden has canceled around $32 billion of federal student loans for 1.6 million borrowers. Specifically, in 2021 and 2022, the U.S. Department of Education has announced that:

• 72,000 student loan borrowers who previously had part of their federal student loans canceled under a borrower defense to repayment claim will now get full student loan relief
• about 41,000 borrowers whose federal student loans were discharged due to total and permanent disability and then reinstated will get a discharge
• borrowers with defaulted Federal Family Education Loans (FFELs) will get a 0% interest rate and that the Department would pause collection actions for these loans during the COVID-19 national emergency
• $500 million of student loan debt for 18,000 student loan borrowers who attended ITT Technical Institute would be canceled under the borrower defense to repayment rule
• $55.6 million of student loan debt will be canceled under the borrower defense to repayment rule for 1,800 defrauded borrowers who attended Westwood College, Marinello Schools of Beauty, or the Court Reporting Institute
• more than 323,000 borrowers with total and permanent disabilities will get automatic student loan discharges
• $1.1 billion in federal student loans for around 115,000 borrowers who attended ITT Technical Institute will be automatically discharged
• it was revamping the Public Service Loan Forgiveness program to allow thousands of student loan borrowers to qualify for loan forgiveness
• $415 million in loans will be canceled for defrauded DeVry University students
• it implemented a new online Public Service Loan Forgiveness appeal and reconsideration process for payment counts and employer qualification
• the Department was making one-time account adjustments to retroactively credit millions of borrowers with additional payments toward loan forgiveness
• it will automatically discharge all remaining federal student loans for those who attended any campus that Corinthian Colleges owned or operated, and
• it will automatically discharge the federal student loans of around 200,000 people to settle a class-action lawsuit.

Also, the American Rescue Plan Act exempts student debt forgiveness from federal taxation until January 1, 2026.

Effective date: August 16, 2022