The Trump administration is granting only partial loan forgiveness to the vast majority of students approved for help because of fraud by for-profit colleges, according to preliminary Education Department data.
Education Department documents show that students filed nearly 24,000 federal fraud complaints between President Donald Trump's Jan. 20, 2017, inauguration and April 30 this year, almost entirely against for-profit colleges.
The lawsuit alleges that ITT Educational's bankruptcy and the closure of its 130-school chain could have been avoided or minimized if the board of directors had fulfilled its duties instead of focusing on keeping former CEO Kevin Modany happy.
The SEC broadly charges that two former ITT Educational Services executives concealed from investors the “extraordinary failure” of two off-balance-sheet student loan programs ITT helped set up in 2009 after the financial crisis shut down the market for traditional private education loans.
The Department of Education is considering only partially forgiving federal loans for students defrauded by for-profit colleges, according to department officials, abandoning the Obama administration's policy of erasing that debt.
Tens of thousands of former students who say they were swindled by for-profit college operators like ITT Educational are being left in limbo as the Trump administration delays action on requests for loan forgiveness.
The SEC in a blistering 56-page suit had charged that the pair concealed the company’s rapidly eroding financial condition and “routinely misled” the firm’s outside accounting firm, PwC. It’s not clear what the terms of the settlements were.
The trustee charges that Sam Odle and fellow outside directors should have ousted CEO Kevin Modany—a move that likely would have been well-received by the U.S. Department of Education and ITT's accrediting agency.