ITT TURMOIL: Ongoing bankruptcy proceedings around the fall of ITT Technical Institute, a former for-profit college system, has cost taxpayers more than $141 million, according to court documents filed last week. Debt relief claims by former ITT Tech students are still being considered, and closed school discharges (a reimbursement of federal loans taken out by students to attend a school that closed) are expected to rise to $460,996,660.
According to POLITICO, that figure doesn’t include “any loan forgiveness that the Education Department provides students on the basis that ITT Tech defrauded them.” So while ITT Tech was previously required to allocate $94 million to “cover the cost of loan forgiveness associated with its collapse,” any amount over that will fall on taxpayers. POLITICO reports that the former students owe nearly “$3.3 billion in federal loans that could be covered by those claims.”
It is not clear if the Education Department has approved any of the “borrower defense to repayment” claims, but the department says the claims are under review.
A hearing will take place on Wednesday with the federal just tasked with the case.