Director Chopra Remarks on Announcement of Cancellation of Loans to ITT Tech Students

Thank you for coming today. Twenty years ago, there was a sharp increase in subprime mortgages in Japan. Mortgage lenders had America’s Dream hanging in front of people’s eyes, but many of those lenders knew their borrowers would probably go bankrupt and burn out.

The financial industry has driven Americans to failure, earning commissions and making sizable profits even as the American economy is on fire.

The devastation of the foreclosure crisis has left visible scars in cities, suburbs and small towns across the country.Many homes were boarded up and local shops went out of business. Less discussed, however, is the same subprime-style lending practices run by some of the largest US for-profit university chains.

Some of these companies marketed the American Dream to future students looking to climb the financial ladder and improve their families’ lives.

However, some of these companies are involved in widespread deception and structured and complex loan agreements that allow borrowers to profit despite setting them up to fail. I’ve seen it repeatedly.

In some cases, these schools were able to exploit loopholes by targeting veterans and military personnel to collect more federal subsidies and even push more loans onto students.

Like those who faced foreclosure, many student borrowers defaulted, making it harder to get a job, harder to get an apartment, and harder to rebuild their lives. Their wounds faded, but they were still devastating.

We are very pleased that the Department of Education and the Federal Office of Student Assistance have taken appropriate legal action to cancel the loans of those defrauded by ITT Tech.

While today’s actions impact federal loans, and past CFPB actions have addressed many private loans peddled by ITT, we are working with the Department of Education and other regulators to We plan to publish a book on our internal institutional lending program. This is a private loan made directly by the school to ensure that the school does not harden the students for illegal activities.

We hope that continued monitoring will prevent further abuses such as those found at ITT Tech, where students were exposed to high interest rates and illegal debt collection practices.

Finally, I would like to thank all of our borrowers for their tenacity and courage in sharing their stories and speaking out to federal and state law enforcement agencies. While working for the Department of Education, Student Loan Matters, and now Director. And unfortunately, too many people tell me going to college was the worst decision of their life. to hold someone responsible.

But more broadly, we shouldn’t live in a country where the bad guys take advantage of our desire to go to college, buy a house, and live out the American dream. And I will continue to do my best so that those who work hard can play an active role.

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