Showing posts with label ITT Tech. Show all posts
Showing posts with label ITT Tech. Show all posts

Tuesday, October 31, 2017

140 people a day die from opioid overdoses, but 3,000 people a day default on their student loans

Approximately 52,000 Americans died from opioid overdoses in 2015. That's an average rate of  around 140 deaths a day. In fact, opioid overdose is now the leading cause of death for Americans under age 50.  If we continue at this rate, a half million Americans will die from drug overdoses over the next ten years--roughly nine times as many Americans as were killed in the Vietnam War.

But let's compare the opioid crisis to the student-loan disaster.  Last year, 1.1 million Americans defaulted on student loans; that's an average rate of 3,000 people a day.  Obviously, defaulting on a student loan is not as serious as dying from a drug overdose. Nevertheless, the consequences of student-loan default are catastrophic.

First of all, a student-loan default triggers penalties and fees that are attached to the unpaid debt, making it less likely that the debtor will ever pay off his or her student loans. Secondly, student-loan defaulters cannot take out more student loans to obtain additional education or training. Third, unlike most unsecured loans, student loans are very difficult to discharge in bankruptcy.

In short, people who default on their student loans run a good chance of becoming lifetime debtors who will never improve their economic circumstances. In other words, a student-loan default is often the equivalent of an economic death sentence.

People who attend for-profit colleges have the highest student-loan default rates. A Brookings Institution report documented that almost half of the people in  a recent cohort who borrowed money to attend a for-profit school defaulted within five years.  Another analysis reported that three out of four African Americans who attended for-profit colleges eventually default on their loans.

In my opinion, a good case can be made that the student-loan catastrophe is causing more harm than the opioid epidemic.  Around 44 million Americans have student-loan debt; that's about one American in five. College-loan indebtedness is hampering people's ability to buy homes, save for retirement, and purchase health insurance. Without question, millions of Americans would have been better off if they had never pursued postsecondary education because the indebtedness they took on degraded the quality of their lives rather than enhanced it.

And Secretary of Education Betsy DeVos has has made the student-debt crisis worse. Again and again, she has made decisions that favor the corrupt for-profit industry at the expense of struggling student loan debtors, even debtors who were defrauded by for-profit colleges.

To its credit, the Obama administration crafted regulations whereby students could apply to the Department of Education to have their student loans forgiven if they were defrauded by the college they attended. Thousands of students have applied for loan forgiveness based on fraud claims, including students who borrowed money to attend two bankrupt for-profit institutions: ITT Tech and Corinthian Colleges.

The Obama regulations were to have taken effect on July 1, 2017, but Betsy DeVos stopped the implementation of these regulations, saying she feared students would get "free money." She then appointed a panel of experts to draft new regulations, which won't be approved until next year. In fact, under the DeVos scheme, defrauded students will not be able to move forward on their claims until 2019 at the earliest.

And it appears that many students will not get complete relief from their loans even if they can prove they were defrauded.  DeVos is talking about giving partial relief based on a formula that will compare the defrauded student's earnings to the average earnings among people who participated in similar educational programs.

The cynicism of this approach is shocking. First of all, by delaying the administrative process until 2019, DeVos is giving fraud victims only three options for handling their oppressive student debt. First, they can continue making loan payments on educational experiences that are worthless to them. Second, they can enter income-based repayment plans that will set monthly payments so low that the interest on their debt will continue to accrue, making their total indebtedness grow larger. Or third, they can default on their loans, which will ruin their credit and cause their debt to grow larger from fees and penalties that the debt collectors tack on to their original debt.

DeVos's tactic is nothing more than sneaky manipulation to aid the for-profit industry, which does not want fraud claims to be examined. If Congress had a moral compass and some courage, DeVos's behavior would lead to a formal resolution calling for her resignation.

Unfortunately, Congress is as beholden to the for-profit colleges as Betsy DeVos. The for-profits have used lobbyists and strategic campaign contributions to buy Congress's silence; and at least a few of our federal representatives (Senators Olympia Snowe and Dianne Feinstein, for example) have personally profited from ties to the for-profit college industry.

And thus our elected representatives are willing to allow millions of lives to be destroyed and the integrity of higher education to be degraded rather than reform the federal student-loan program.  In sum, Congress is willing to tolerate human suffering that may exceed the harm caused by opioid addiction.



References

Maria Danilova. DeVos may only partially wipe away some student loansDetroit News, October 28, 2017.

Josh Katz. Drug Deaths in America are Rising Faster Than Ever. New York Times, June 5, 2017.

Tamar Lewin. Questions Follow Leader of For-Profit CollegesNew York Times,May 26, 2011.

Ben Miller. New Federal Data Show a Student Loan Crisis for African American Borrowers. Center for American Progress, October 16, 2017.

Bob Samuels. The For-Profit College Bubble: Exploiting the Poor to Give to the RichHuffington Post, May 25, 2011.

The Wrong Move on Student LoansNew York Times, April 6, 2017.

Thursday, October 26, 2017

Like a Galapagos tortoise, Education Department ponders debt relief for students victimized by the for-profit colleges

Corinthian Colleges filed for bankruptcy in 2015, and ITT Tech went bankrupt a year later. Together, the two for-profit college companies left more than half a million students and former students in the lurch. Thousands of these victims filed so-called borrower-defense claims with the Department of Education, asking DOE to forgive their student loans on the grounds that they were defrauded.

The Obama administration approved regulations for processing these claims, but Betsy DeVos put them on hold. She was concerned, she said, that the Obama rules might give undeserving students "free money."

Now DOE has approved a panel of 17 experts to overhaul the Obama regulations. According to a story in Inside Higher Ed, the DeVos Department anticipates the new rules won't go into effect until 2019. Under that timetable, defrauded borrowers won't even have an avenue of relief until four years after Corinthian filed for bankruptcy.

Meanwhile, hundreds of thousands of student borrowers who attended one of the Corinthian schools, ITT Tech, and dozens of other dodgy for-profit colleges will be making monthly loan payments for worthless education experiences. Hundreds of thousands of others will put their loans into deferment, which will relieve them from making loan payments but will cause their loan balances to go up due to accruing interest. And thousands more will simply default, which will allow the federal government's sleazy loan collectors to slap on penalties and fees to their loan balances.

But DeVos doesn't give a damn about the carnage wreaked by the corrupt for-profit college industry. In fact, she is doing everything she can to prop it up.

And so, Betsy DeVos, Amway heiress and for-profit co-conspirator, lumbers along like a Galapagos tortoise, oblivious to the misery experienced by millions of student debtors--who are now defaulting at the rate of 3,000 a day.

The DeVos Education Department ponders student-loan debt relief.
References

Danielle Douglas-Gabriel. Former ITT Tech students fight for some money in the company's bankruptcy case. Los Angeles Times, January 3, 2016.

Andrew Kreighbaum. Education Dept. Borrower-Defense Negotiators. Inside Higher Ed, October 26, 2017.

Shahien Nasiripour. Corinthian Colleges files for bankruptcy. Huffington Post, May 5, 2015.

The Wrong Move on Student LoansNew York Times, April 6, 2017.

Thursday, December 15, 2016

Defrauded students file debt-relief applications with the Department of Education: Bankruptcy courts can provide relief faster and more efficiently than DOE bureaucrats

When Betsy DeVos takes over as the new Secretary of Education next year, she will inherit one huge headache--thousands of pending applications for loan forgiveness from students who claim they were defrauded by various for-profit universities.

As Andrew Kreighbaum explained in a recent article for Inside Higher Ed, the Department of Education had received 80,000 loan discharge applications as of last October; and the total number has likely grown to at least 100,000.

So far, DOE has approved 15,694 applications for discharge from students who attended three campuses owned by the now defunct Corinthian Colleges system, but many more of Corinthian's former students are surely eligible for loan forgiveness based on fraud claims. After all, Corinthian has 350,000 former students.

And there are hundreds of other student borrowers who may file loan-forgiveness applications: students from ITT Tech Services, Globe University, Minnesota School of Business, and several more for-profits that closed after being accused of wrongdoing.

I. Problems with forgiving loans through the DOE administrative process

DOE has been extremely slow to process borrower defense applications; I know one young woman who filed her application in August based on a claim she was defrauded by DeVry University. She has yet to receive a response from DOE.

New federal regulations for processing borrower defense claims will become effective next summer, but there are several fundamental challenges that new regulations won't solve:
1. Tax consequences. First, all former for-profit student who have their student loans forgiven will have a one-time tax liability because the amount of their forgiven loans is considered taxable income by the IRS. 
2. Forfeiture of college credits. Under the current debt-relief program, students whose student loans are forgiven due to fraud will forfeit any credits they received from the institution they attended.

3. Insufficient DOE resources. Third, the Department of Education simply doesn't have the resources to process thousands of loan forgiveness claims in a timely manner, not to mention the thousands of new claims that will inevitably be filed as more for-profit colleges close their doors.
II Bankruptcy is a better way to process loan forgiveness applications

Fortunately, there is a solution to these problems; it's called the bankruptcy courts.

First, debtors whose student loans are discharged in bankruptcy will not suffer tax consequences for a forgiven loan because under current IRS rules forgiven debts are not taxable to an individual who is insolvent at the time the loan is forgiven.

Second, a student debtor who discharges student loans from a for--profit college through the bankruptcy process will not forfeit credits or degrees conferred by the college.

Finally, the bankruptcy courts clearly have the resources to process hundreds of thousands of bankruptcy petitions filed by distressed student-loan debtors. Filing an individual Chapter 7 action is relatively simple and does not require a lawyer.  Bankruptcy petitions could be routinely resolved in the bankruptcy courts, which have the expertise to weed out fraudulent or unworthy claims.

III. DOE has the authority to reinterpret the  "undue hardship" standard 

Critics might argue that my proposal is unworkable because anyone seeking to discharge student loans in bankruptcy must meet the "undue hardship" standard, a very difficult standard to meet.  But there is a solution for that challenge as well.

All DOE needs to do to ease the path to bankruptcy relief for insolvent student-loan debtors with fraud claims is to write an official letter expressing its view that every insolvent debtor who attended a for-profit college that has been found to have acted fraudulently meets the undue hardship standard.

In essence, such a letter would be a a revision of DOE's letter issued on July 7, 2015, giving the Department's interpretation of the "undue hardship" rule. In all likelihood, the bankruptcy courts would defer to DOE's revised interpretation of "undue hardship" and begin discharging student loans routinely.

Of course, DOE would also need to direct the various student-loan guaranty agencies to stop opposing bankruptcy relief for any insolvent debtor with a fraud claim against a for-profit college.

Easing the path to bankruptcy relief for distressed debtors who took out student loans to attend dodgy for-profit colleges will cost taxpayers billions. But most of the people who took out these loans will never pay the money back anyway. Almost 50 percent of the people who took out loans to attend for--profit colleges default on those loans within five years. Others enter into income-driven repayment plans that lower monthly payments, but according to the Government Accountability Office, about half the people who begin these plans are kicked out for failing to verifying their income on an annual basis.

So let's begin cleaning up the mess our government created when it began shoveling federal student-aid money to  the rapacious for-profit college industry. Let's shut these colleges down and wipe out the student-loan debt accumulated by millions of victims of massive fraud. Incoming Secretary of Education Betsy DeVos will have the authority to grant relief to these victims by easing the path toward bankruptcy. Let's hope this is what she does.

Incoming Secretary of Education Betsy DeVos


References

Andrew Kreighbaum. Activists and borrowers call on Obama administration to provide debt relief to defrauded students. Inside Higher Ed, December 14, 2016.

Adam Looney & Constantine Yannelis, A crisis in student loans? How changes in the characteristics of borrowers and in the institutions they attended contributed to rising default ratesWashington, DC: Brookings Institution (2015). Accessible at: http://www.brookings.edu/about/projects/bpea/papers/2015/looney-yannelis-student-loan-defaults

Lynn Mahaffie, Undue Hardship Discharge of Title IV Loans in Bankruptcy Adversary Proceedings. CL ID: GEN 15-13, July 7, 2015.

Eric Rosenberg.You Need to Know How Student Loan Forgiveness Is Taxed.  Studentloanhero.com, July 18, 2016.

US. Government Accounting Office. Federal Student Loans: Education Needs to Improve Its Income-Driven Repayment Plan Budget Estimates. Washington, DC: U.S. Government Accounting Office, November, 2016.







Tuesday, December 6, 2016

The Department of Education denies student-aid money to Globe University and Minnesota School of Business: Surely the end is near for Globe/MSB

The Department of Education announced this week that it is suspending Globe University and Minnesota School of Business from participating in the federal student aid program. Last September a Minnesota judge ruled that Globe and MSB had fraudulently marketed their criminal justice programs, and the Minnesota Office of Higher Education began the process of revoking the schools' authorization to operate.

Globe and MSB had over 9,000 students as recently as 2010, but enrollments plummeted after the Minnesota Attorney General's Office began investigating the institutions. According to a news story, students spent as much as $80,000 to obtain degrees in criminal justice, but these degrees did not lead to jobs as Minnesota police or probation officers. Apparently, the schools' programs were not accredited by the Minnesota Board of Peace Officer Standards and Training.

 It is hard to see how Globe and MSB can continue to operate without as steady infusions of federal student-aid money. Together the two schools received more than $50 million in federal aid money for the 2014-2015 academic year.  Earlier this year, DOE cut ITT Tech off from federal student-aid money, and that institution closed and filed for bankruptcy shortly thereafter. It seems likely that Globe University and MSB will be closing soon--perhaps within a few weeks.

It is good to see DOE and state attorneys general going after for-profit institutions that prey on unwary students. Without a doubt, vigorous enforcement actions will force a lot of shady institutions to close.

But hundreds of thousands of students have taken out billions of dollars in federal student loans to attend for-profit institutions, and their student loans are not automatically forgiven if the institution they attended is found liable for fraud. Although DOE has a closed-school loan forgiveness program and a process whereby students can seek loan forgiveness if they were defrauded by the college they attended, both processes are cumbersome and slow.

In my view, all students who attended a for-profit college should have their student loans automatically forgiven if the college they attended is found liable by a competent court of defrauding students  or violating consumer protection laws. Of course, discharging all these student loans would be a huge hit for taxpayers, but it is not fair for students who were lured into taking out loans to receive substandard training or education from sketchy for-profit colleges to be burdened by debt they simply will never be able to pay.




References

Christopher Magan. Fraud ruling threatens Globe U, Minnesota School  of Business with closure. Twin City Pioneer Press, September 8, 2016.

Judge Orders Globe University, Minnesota School of Business to Stop Fraudulent Marketing. KSTP Televsion News, September 10, 2016.

U.S. Department of Education. Globe University, Minnesota School of  Business Denied Access to Federal Student Aid Dollars. US. Department of Education Press Release, December 6, 2016.

 

Thursday, September 22, 2016

Senator Elizabeth Warren grills Wells Fargo CEO John Stumpf. But hey, Liz: What have you done to help solve the student-loan crisis?

Senator Elizabeth Warren made headlines this week when she grilled Wells Fargo CEO John Stumpf at a Senate Banking Committee hearing. Unless you've been living under a rock, you know Wells Fargo employees were caught scamming customers by creating 2 million fake bank accounts without their customers' knowledge or approval.

In the wake of this scandal, Wells Fargo fired 5,000 low-level employees and refunded some money, but the company did not terminate the senior executive who supervised the unit where the fraud occurred. Wells Fargo's CEO John Stumpf made millions of dollars from these misdeeds because the scheme caused his stock to go up. But Stumpf isn't giving back any of his ill-gained profits.

So Stumpf was a sitting duck when Senator Warren began questioning him at the Senate Banking Committee hearing. "You should resign," Warren told Stumpf. "You should give back the money that you took while this scam was going on, and you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission."

Stumpf, of course, is lawyered up. He went into his flak-catcher crouch, continually repeating his talking points and saying he was sorry for Wells Fargo's misdeeds.

All great theater. Who doesn't enjoy seeing a transnational financial executive publicly humiliated? But what will come of all this drama? Nothing. Stumpf won't face criminal charges, and the Wells Fargo senior executives who profited from the fake-account scheme won't give back a penny of their loot.

Elizabeth Warren enjoys a great reputation as the champion of consumer rights and the friend of the little guy. But what tangible thing has she done to help working-class Americans? And more particularly, what has she done to ease the suffering of millions of student-loan debtors?

I'll tell you what Warren has done--she's done nothing.  She's all blather. In fact, I don't think Warren even understands the student-loan crisis. She charged awhile back that the government is making "obscene" profits from the student-loan program, but that's not true. The government would be making a profit on the loan program if borrowers were paying back their loans, but they are not. As the Wall Street Journal reported recently, 40 percent of student-loan borrowers aren't making payments on their loans.

Here are some things Senator Warren could propose that would help relieve the suffering of distressed student-loan debtors.

Legislation banning the government from garnishing the Social Security checks of elderly student-loan debtors who defaulted on their loans. Around 155,000 Americans are having their Social Security checks dunned right now, causing real hardship for these people.

And how much money does our government collect from this disreputable practice? Probably less than the Secret Service spends guarding President Obama on just one of his Hawaiian vacations. Why doesn't Senator Warren use her bully pulpit to stop the government from going after elderly student-loan debtors who are living off their Social Security checks?

Wholesale relief for student-loan borrowers who were ripped off by the for-profit college industry. Senator Warren joined 22 other Democratic Senators in a letter to Secretary of Education John King asking the Department of Education to grant broader relief to the 35,000 students who were enrolled at one of ITT Tech campuses when ITT closed and filed for bankruptcy. But that letter is almost completely incoherent and doesn't  propose real relief.

DOE should forgive the loans of all the people who took out student loans to pay for ITT programs. Giving former students longer to file for loan forgiveness under DOE's "closed school" regulations (as the Democratic Senators proposed) does not go nearly far enough.

Amending the Bankruptcy Code to allow distressed student-loan debtors to discharge their federal student loans in bankruptcy like any other nonsecured debt. Senator Warren co-sponsored a bill to make private student loans dischargeable in bankruptcy, but private loans are only a small part of the overall student-debt crisis--only about 10 percent of total outstanding student-loan debt. The bill does nothing about reforming the Bankruptcy Code to allow distressed student-loan debtors to discharge their federal student loans in bankruptcy.

Conclusion; Senator Elizabeth Warren is a phony

Senator Elizabeth Warren is a phony. She hasn't accomplished anything significant to help solve the student-loan crisis. It is true she supports a bill to make private student loans dischargeable in bankruptcy, but such a law--if passed--is small potatoes.

Let's face it. Although Warren portrays herself as a progressive fighting for overburdened student-loan debtors, she will never do anything that would threaten the core interests of the higher education industry. After all, there are 114 colleges and universities in Warren's state of Massachusetts; and most of the professors and administrators who work at those colleges voted for her.

Those colleges and universities have to have federal student-aid money to survive. They are like crack addicts waiting for their next federal fix. Warren can talk all she wants about helping student-loan debtors, but she won't do anything that upsets the status quo. And real reform of the Bankruptcy Code to allow people to discharge their federal loans in bankruptcy would definitely upset the status quo.

Image result for elizabeth warren wells fargo


References

Anne Gearan and Abby Phillip. Clinton to propose 3-month hiatus for repayment of  student loansWashington Post, July 5, 2016. Accessible at https://www.washingtonpost.com/news/post-politics/wp/2016/07/05/clinton-to-propose-3-month-hiatus-for-repayment-of-student-loans/?hpid=hp_special-topic-chain_clinton-loans-11pm%3Ahomepage%2Fstory

Ashlee Kieler, Senators Introduce Legislation to Make Private Student Loans Dischargeable in Bankruptcy. Consumerist, March 12, 2015.   Accessible at https://consumerist.com/2015/03/12/senators-introduce-legislation-to-make-private-student-loans-dischargeable-in-bankruptcy/

Jena McGregor. 'You should resign': Elizabeth Warren excoriates Wells Fargo CEO John Stumpf. Washington Post, September 20, 2016. Accessible at https://www.washingtonpost.com/news/on-leadership/wp/2016/09/20/you-should-resign-elizabeth-warren-excoriates-wells-fargo-ceo-john-stumpf/

Josh Mitchell. More than 40% of Student Borrowers Aren't Making PaymentsWall Street Journal, April 7, 2016. Accessible at http://www.wsj.com/articles/more-than-40-of-student-borrowers-arent-making-payments-1459971348

Secretary of Education John B. King Jr. A Message from the Secretary of Education to ITT Students. Accessible at http://blog.ed.gov/2016/09/message-secretary-education-itt-students/

Sen. Warren Questions lack of Private Student Loan Relief Options. Senator Warren Website, July 31, 2014. Accessible at https://www.warren.senate.gov/?p=press_release&id=591

Letter to the Honorable John King, Secretary of Education, from 23 Democratic Senators, September 15, 2016. Accessible at https://www.insidehighered.com/sites/default/server_files/files/9_15_16%20ITT%20Tech%20ED%20Letter%20(1).pdf

Dawn McCarty and Shahien Nasirpour. ITT Educational Services Files for Bankruptcy After ShutdownBloomberg, September 16, 2016. Accessible at http://www.bloomberg.com/news/articles/2016-09-16/itt-educational-services-files-for-bankruptcy-after-shutdown-it6byu6t

Jena McGregor. 'You should resign': Elizabeth Warren excoriates Wells Fargo CEO John Stumpf, Washington Post, September 20, 2016. Accessible at

Reuters. ITT Educational Services Files for Bankruptcy After Aid CrackdownInternational New York Times, September 17, 2016. Accessible at http://www.nytimes.com/2016/09/18/business/itt-educational-services-files-for-bankruptcy-after-aid-crackdown.html?_r=0


Marian Wang. Q & A: Elizabeth Warren on Spiraling Student Debt  and What Should Be Done About ItPro Publica, May 20, 2014. Accessible at https://www.propublica.org/article/qa-elizabeth-warren-on-spiraling-student-debt-and-what-should-be-done-about

Alia Wong. When Loan Forgiveness Isn't EnoughAtlantic Monthly, June 15, 2015. Accessible at http://www.theatlantic.com/education/archive/2015/06/government-corinthian-college-loan-plan-problems/395513/

Monday, August 29, 2016

ITT Tech is teetering on the brink of collapse due to pressure from the U.S. Department of Education: Why did DOE wait so long to aggressively regulate the for-profit college industry?

ITT Educational Services, owner of ITT Technical Institute, is on the verge of collapse. A few days ago, the U.S. Department of Education issued a directive barring ITT from enrolling any students who rely on federal financial aid to pay their tuition.

DOE's recent action may be the coup de grĂ¢ce for this tottering for-profit chain of technical schools. ITT gets 80 percent of its revenues from federal student aid monies.  Now that DOE has turned off the spigot of federal funds, ITT's days are numbered. In fact, if you want to measure ITT's pulse, just look at its stock price.   The company's stock was trading today at about 51 cents a share. In 2009, the stock sold at more than 200 times today's price--$128!

Shahien Nasiripour, a Bloomberg reporter, argued recently that the Department of Education does not know what it is doing when it comes to regulating for-profit colleges. Nasiripour wrote that DOE bungled the regulation of Corinthian Colleges and was surprised when the college chain filed for bankruptcy, leaving thousands of students in the lurch.   Nasiripour quoted an observer who said that "[t]he Education Department hasn't been a good analyst of corporate balance sheets."

Now, Nasiripour maintains, DOE is repeating its mistake with ITT and may "unwittingly exacerbate ITT's financial woes."

I disagree with Nasiripour. I think DOE knows exactly what it is doing to ITT and is fully mindful that its recent regulatory actions will likely drive ITT out of business. DOE surely knows that cutting ITT off from federal student aid money will shut off most of its revenues. And not long ago, DOE ordered ITT to almost double its cash reserves--from $124 million to $247 million, which ITT almost certainly is unable to do.

Why is the Obama's DOE acting so aggressively against the for-profit college industry now that Obama has less than three months left in his final term? Is DOE moving against the for-profits now because Obama no longer cares about the political consequences of cracking down on a powerful industry?

Or is DOE pressuring the for-profits to drive down their stock prices so that friendly investors can snap them up for a song and make a killing? Martin Nesbitt, a close confidant of Barack Obama, is leading a group of equity funds to purchase Apollo Education Group, the University of Phoenix's owner. If the deal goes through, Nesbitt's partners will only pay around $9 a share for the stock--about a tenth of Apollo's all-time-high share price.

If ITT gets bought up by financial vultures, it will be interesting to see if the new owners have ties to the Obama administration.

But let's give Obama's DOE the benefit of the doubt and assume that it is finally doing what it should have done a long time ago, which is aggressively regulate the for-profit industry in order to protect students from disreputable operators.

But DOE officials should remember that shutting down reputedly shady for-profit colleges is only half the job.  Corinthian Colleges had about 300,000 former students at the time it filed for bankruptcy and most of them took out federal student loans. All those people should have their student loans forgiven.

If DOE shuts down ITT--which it is apparently trying to do with its recent regulatory actions, it needs to provide relief for all of ITT's indebted students--both current enrollees and former students.

If  ITT closes and DOE forces all these hapless student-loan debtors into a tedious administrative process in order to get their student loans forgiven, then we will know that the Obama administration doesn't really care about the students who attended for-profit colleges.  Rather, knowingly or unknowingly, DOE may simply be driving down the value of for-profit colleges in a way that allows new investors to swoop down and scoop them up at bargain prices.

References

Shahien Nasiripour. The Obama Administration Could Cause the Next Big For-Profit College Collapsehttp://www.bloomberg.com/news/articles/2016-06-09/the-obama-administration-could-cause-the-next-big-for-profit-college-collapse. Bloomberg.com, June 9, 2016.  Accessible at http://www.bloomberg.com/news/articles/2016-06-09/the-obama-administration-could-cause-the-next-big-for-profit-college-collapse

Josh Mitchell. Education Department Orders ITT Educational to Bolster Finances. Wall Street Journal, June 6, 2016. Accessible at http://www.wsj.com/articles/education-department-orders-itt-educational-to-bolster-finances-1465246531

Mark Muckenfuss. New Sanctions Against ITT Tech will limit enrollment. Press Enterprise, August 26, 2016.  Acessible at http://www.pe.com/articles/students-811674-itt-school.html