Washington, DC – United States Senator Elizabeth Warren (D-Mass.) joined Senate Democratic Whip Dick Durbin (D-Ill.), and Senators Richard Blumenthal (D-CT), and Sherrod Brown (D-OH), today in sending a letter to Secretary of Education Betsy 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 discharge, or loan cancellation for students who were enrolled at the time of school closure, for borrowers who have not enrolled in another Title IV program of study within three years of their school’s closure. Yesterday marked three years since the closure of ITT. DeVos’ new rule would eliminate automatic closed school discharges for borrowers whose schools close after July 1, 2020.

 

“As of yesterday, even former ITT students who have not applied for closed school discharge, but are eligible, must have their loans fully discharged,” the Senators wrote.

  

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.  

 

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 to which the students were entitled. 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.

 

However, Secretary DeVos has failed to process borrower defense discharges for tens of thousands of defrauded borrowers—including thousands of former ITT students.  

 

Senator Warren has been working to hold the federal government accountable for the administration, oversight, and cancellation of student loans since her 2012 election to the Senate. More information on her oversight of the Department of Education under Secretary DeVos, can be found at “DeVos Watch.”