The rule is expected to put many for-profit college programs in jeopardy. At not-for-profit colleges, it would have no effect beyond certificate programs, which often focus on career training.
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Students who used federal loans to attend Carmel-based ITT Technical Institute as far back as 2005 will automatically get that debt canceled after authorities found “widespread and pervasive misrepresentations” at the defunct for-profit college chain.
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Almost all the schools involved are for-profit colleges. The list includes ITT Technical Institute, which was headquartered in Carmel and shut down in 2016.
This is the fourth finding against Carmel-based ITT Tech that has led to the approval of debt relief claims by the department. All told, the evidence has resulted in about $660 million in discharges for roughly 23,000 students.
The Education Department announced Thursday it will forgive student debt for more than 100,000 borrowers who attended colleges in the now-defunct, Carmel-based ITT Technical Institute chain but left before graduating.
The U.S. Education Department said Wednesday it was erasing student debt for thousands of borrowers who attended the for-profit college chain, which closed in 2016. The chain’s parent, ITT Educational Services Inc., was based in Carmel.
The council gained notoriety for allowing for-profit chains Corinthian Colleges and Carmel-based ITT Technical Institute to remain accredited despite widespread findings of fraud.
The Education Department said many claims were submitted by borrowers who attended ineligible programs or who failed to make a valid claim for loan forgiveness.
More than 1,300 students who were enrolled at now-closed ITT Technical Institute campuses in Indiana are eligible for student loan forgiveness as part of a $330 million national settlement affecting as many as 35,000 former ITT students.
The collapse of for-profit chains Corinthian Colleges and Carmel-based ITT Technical Institutes ushered in a flood of claims that are still being resolved.
Elements Financial, formerly the Eli Lilly Federal Credit Union, is among seven credit unions that collectively agreed to pay $7.5 million to settle a lawsuit brought by ITT Educational Services' bankruptcy trustee.
