Attorney General Calls On U.S. Dept. Of Education To Cancel Loans Of ITT Tech Students


Attorney General Balderas today called on the U.S. Department of Education to cancel federal student loan debt of those who attended ITT Technical Institute. The now defunct for-profit school defrauded thousands of individuals by encouraging them to enroll and borrow loans based on false and misleading information about the value of an ITT degree and empty promises of high-paying jobs after graduation. The borrower defense application that a bipartisan coalition of 24 states and the District of Columbia filed today includes students who attended ITT Tech between at least 2007 and 2011 when these deceptive tactics were used to convince students to attend the school and borrow federal student aid. This widespread and pervasive misrepresentation violated state consumer protection laws. Federal law permits the Department of Education to forgive federal student loans when borrowers were deceived in obtaining loans. The attorneys general are demanding full relief to ITT students, including refunds of the money students already paid on those loans. 

“Students who are trying to achieve the American dream and make a better life for their families should not be taken advantage of by for-profit schools and be left with burdensome debt,” said Attorney General Balderas. “My office will continue to fight on behalf of students and families to ensure their safety and opportunities for prosperity.”

Based on a 2012 congressional report, ITT enrolled roughly 282,000 students across the country between 2007-2010. During this enrollment period, ITT showed a document, “Value Proposition for Employed Graduates,” to prospective students to convince them to enroll and, in most cases, borrow thousands of dollars in federal student aid. Analysis of the Value Proposition chart (Figure 1 in the document), revealed that ITT misrepresented the value of its education, claiming it would be substantial, and that students who enrolled would get high-paying jobs upon graduation with a constant rate of earning growth. ITT’s Value Proposition chart shows a projected annual salary over an estimated work life, misrepresenting the projected annual earnings for ITT graduates at $100,000 more than the average earnings of workers with the same credentials.

Dr. Jordan Matsudaira, an Associate Professor of Economics and Education Policy at Columbia University, analyzed and evaluated the accuracy of this chart and ITT’s claims. Matsudaira found that ITT massively overestimated the financial gains that borrowers could reasonably expect from an ITT program. 

Attorney General Balderas joined in the letter with the attorneys general of Colorado, Connecticut, the District of Columbia, Hawaii, Idaho, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Vermont, Virginia, Washington, and Wisconsin.