Oregon asks US Department of Education to cancel more ITT Tech student loans

Two previous settlements involved nearly 500 former students

SALEM, Ore. (KTVZ) – Oregon Attorney General Ellen Rosenblum filed a request Thursday with the US Department of Education, calling for the cancellation of federal student loan debt for thousands of former students, including an unknown number of Oregonians, who attended the ITT Technical Institute.

Rosenblum was joined in the request by a bipartisan group of 25 state attorneys general. The now defunct for-profit school defrauded thousands of students by encouraging them to enroll and take out loans based on misleading information about the value of an ITT degree and empty promises well-paying jobs after graduation.

The claim, filed under the DOE’s Borrower Defense Rule, was filed on behalf of students enrolled at ITT Tech between 2007 and 2010 when these deceptive tactics were used. This rule is available if a school is misleading students and violating state consumer laws. The borrower’s defense applies only to direct federal loans, not to private student loans or other loans administered by federal or state agencies.

“Students who attended ITT Tech during that four-year period were drawn to the for-profit school based on the promise that their degree would be immensely valuable upon graduation. It just wasn’t the case, ”Rosenblum said.

“ITT Tech’s profit motive has resulted in it taking millions of dollars from thousands of students, who ended up with nothing more than big debt and a shoddy degree. I hope that the education ministry will move swiftly to secure full loan relief, including forgiveness of outstanding debt, as well as repayments of payments already made – for all affected alumni.

This is not the first time Rosenblum has sought redress for defrauded ITT Tech students. In 2019, Oregon provided $ 2.2 million in debt relief to 242 Oregon ITT Tech alumni with Student CU Connect CUSO, which funded private student loans for ITT students.

Last year, Oregon agreed to $ 1.6 million in debt forgiveness for 231 Oregon ITT Tech alumni with PEAKS Trust, a private loan program run by ITT and affiliated with Deutsche Entities. Bank.

Deceive the students

Based on a Congress Report 2012, ITT enrolled approximately 282,000 students across the country between 2007-2010. During this enrollment period, ITT showed a document titled “Value Proposition for Employed Graduates” to prospective students to convince them to enroll and, in most cases, borrow thousands of dollars. federal student aid.

Analysis of the value proposition chart revealed that ITT distorted the value of its education, claiming it would be substantial, and enrolled students would get well-paying jobs after graduation with a rate constant revenue growth.

ITT’s value proposition chart showed that ITT estimated the earnings of ITT graduates to be $ 100,000 more than the average earnings of workers with the same degrees over a graduate’s estimated lifespan. Dr Jordan Matsudaira, associate professor of economics and educational policy at Columbia University, assessed the accuracy of ITT’s claims.

Matsudaira found that ITT massively overestimated the financial gains that student borrowers could reasonably expect from an ITT program. This widespread and pervasive misrepresentation violated state consumer protection laws.

Rosenblum led the request to the US Department of Education, along with Colorado Attorney General Phil Weiser. The request was also signed by 24 states and the District of Columbia.

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