The Project on Predatory Student Lending recently released a report detailing the massive scale of fraud and abuse perpetrated by the defunct for-profit college ITT Tech. The report, “Dreams Destroyed: How ITT Technical Institute Defrauded a Generation of Students,” was sent in mid-February to U.S. Education Secretary Miguel Cardona. It presents the largest volume of evidence compiled on ITT’s fraudulent conduct, including thousands of ITT’s own records that show it systematically and brazenly lied to students in order to profit from their federal financial aid.
“The picture that emerges is of a large-scale loan-packaging operation. The loans were the object, not education or career training,” said Eileen Connor, Director of the Project on Predatory Student Lending. “The cancellation of all remaining ITT debt is the only conscionable and reasonable course of action.”
The Project, which represents borrowers in the ITT bankruptcy, is calling on the U.S Department of Education to fully cancel all ITT student loans.
In February, the department said that it will cancel the federal student loans of nearly 16,000 people defrauded by DeVry University, ITT Technical Institute, and Minnesota School of Business/Globe University. But this is only a portion of the students defrauded by ITT. Also, the department is approving debt relief claims from former students of an institution, DeVry, that is still open and receiving federal financial aid funding.
Go After Executives
In an interview with NPR in February, Connor called on the U.S. Department of Education to go after executives of for-profit universities that defrauded borrowers. She argues that holding executives liable creates a powerful, symbolic deterrent for future would-be fraudsters.
“I wouldn’t just say that they have the authority” to go after school executives, says Connor. “I’d say they have the obligation to do it.”
States Over-promise and Under-deliver on Navient Fraud
An earlier deal between 39 states and Navient, a student lending giant accused of unfairly ensnaring borrowers, was also criticized by the Project. While the settlement will wipe away $1.7 billion in private student loans for 66,000 individuals in default, those who were managing to make the payments for worthless degrees will have to keep paying.
Of the Navient settlement, Connor told the New York Times: “The states have used a familiar playbook in reaching the settlements. It’s ‘Let’s make this big splashy announcement’ that creates the impression in the public’s mind — and, sadly, in the minds of people who have these loans — that relief is here. But when you get into the details, it’s not actually helping many people.”