Attorney General Rosenblum Calls on US Department of Education to Forgive ITT Tech Student Loans


Attorney General Ellen Rosenblum today filed an application with the US Department of Education requesting the forgiveness of federal student loan debt for thousands of former students, including an unknown number of Oregonians, who attended the ITT Technical Institute. AG Rosenblum was joined in the request by a bipartisan group of 25 state AGs. 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. ITT Tech’s profit motive led it to take millions of dollars from thousands of students, who ended up with nothing more than big debt and a shoddy degree. I hope the Ministry of Education moves quickly to achieve full loan relief – including the cancellation of outstanding debts, as well as the repayment of payments already made – for all affected alumni, ”said the Minister of Education. Attorney General Rosenblum.

This is not the first time that AG 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 US entities. Deutsche Bank.

Deceive the students

Based on a 2012 Congress report, ITT enrolled approximately 282,000 students across the country between 2007 and 2010. During this enrollment period, ITT showed a document titled “Value Proposition for Graduates employees ”to potential students to convince them to enroll and, in most cases, borrow thousands of dollars in federal student aid. Analysis of the value proposition table 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 student borrowers could reasonably expect from an ITT program. This widespread and pervasive misrepresentation violated the state’s consumer protection laws.

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

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