If you attended ITT Technical Institute at any point between 2005 and when it closed in 2016 and obtained federal student loans to pay for it, you may be breathing easier. The Department of Education announced Tuesday that about 208,000 borrowers with a total of $3.9 billion in debt would see their debt forgiven because of “widespread and pervasive misrepresentations.”
That makes sense. The federal stamp of approval on bank accounts and mortgages and other such financial instruments protects the people. Student loans should, too.
So should regulation.
For-profit institutions like many of those that have shuttered amid financial problems in the last decade or two should have been better regulated to prevent so many students from paying huge sums and to prevent the federal government from now stepping in to call foul.
There is also another component to consider. Buyers have to beware.
This isn’t victim-blaming. When a for-profit school acts in a predatory manner, the company that at best is fudging its advertising and at worst committing outright fraud is at fault.
But that makes it all the more important to help 17- and 18-year-olds to have all the information necessary to make smart choices. It may be most critical for older workers seeking retraining in a new field.
For example, ITT Tech had multiple branches over the years in the Pittsburgh area. It offered programs such as computer drafting and design, business administration, information technology and electrical engineering. Those are good fields to enter with the potential for well-paying jobs.
The problem is that when the schools closed, tuition for those programs was about $18,000 per year. Six years later, Penn State — one of the most expensive public schools in the country — charges $19,286 if you are at the main campus. Stay at a Commonwealth Campus and pay as low as $14,000. Pitt’s tuition starts at $19,760 for undergrads.
So, do we really think an ITT education was comparable to two of the best schools in the state — well-recognized names across the country?
But those aren’t the only options. Indiana University of Pennsylvania is less than $12,000 a year if you don’t stay in a dorm. Even more affordable? Westmoreland County Community College is just over $4,140 for a year of full-time classes. Allegheny County Community College is $4,590.
Universities like IUP, Penn State and Pitt are encouraging financial literacy programs for students to help cut down on the amount of debt graduates carry when they leave. But that has to start earlier.
The math has to be part of the conversation in high school and with families before anyone asks a minor or new adult — the kind who can’t drink alcohol or rent a car — to commit to thousands of dollars in debt with long-term consequences. It must be part of helping displaced or returning workers make decisions about enrolling in school.
And it must be done in an accessible and understandable way — not with glossy ad campaigns and slick promises. Trying to find the cost of a year of school shouldn’t be like negotiating the purchase of a used car with a long list of options and an encouragement to buy big and rely on financing.
That is how you get the federal government writing off billions in bad debt for misled students.
