Government

Finkenauer pushes to cancel student debt for victims of for-profit 'bad actors'

Wronged student: 'ITT Technical Institute did nothing for me but take time and money'

Rep. Abby Finkenauer listens as Jeff O’Brien shares his experience during a news conference announcing the Relief for Defrauded Students Act of 2019 at Kirkwood Community College in Cedar Rapids on Monday, July 8, 2019. O’Brien is a Cedar Rapids resident, student and veteran who took out loans to attend ITT Tech. (Liz Martin/The Gazette)
Rep. Abby Finkenauer listens as Jeff O’Brien shares his experience during a news conference announcing the Relief for Defrauded Students Act of 2019 at Kirkwood Community College in Cedar Rapids on Monday, July 8, 2019. O’Brien is a Cedar Rapids resident, student and veteran who took out loans to attend ITT Tech. (Liz Martin/The Gazette)
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CEDAR RAPIDS — Jeff O’Brien hoped ITT Technical Institute would help him get the bachelor’s degree in project and construction management he wanted. Instead, the school manipulated him into taking high-interest loans and unnecessary courses that cost him tens of thousands — then left him with nothing, he said Monday.

Now a 30-year-old U.S. Army Reserve veteran working as a virtual design and construction manager in Cedar Rapids, O’Brien served Monday as a chief example of the students who freshman Democratic U.S. Rep. Abby Finkenauer said would be helped by a bill she plans to introduce this week

The “Relief for Defrauded Students Act of 2019” aims to cancel the debt of defrauded students and return to those victims of deceptive practices any money they’ve paid toward the predatory loans.

ITT Technical Institute, which closed abruptly in 2016 and filed for bankruptcy protection, is an example of a “bad actor” for-profit college that said took in students by “not accurately representing their costs, promising job skills without any attempt to actually teach them, hiding high-loan default rates, and lying to students about whether their credits would be recognized,” the congresswoman said.

She noted a rule already exists requiring the U.S. Department of Education provide relief to students who prove they’ve been defrauded by the colleges. “But unfortunately, that rule right now isn’t being enforced,” she said.

More than 158,000 claims have been made for relief “but none have been acted upon,” Finkenauer said. “This bill will change that and will provide students with federal loans the relief they’re required to receive but just aren’t getting.”

O’Brien, flanked Monday by Finkenauer and Kirkwood President Lori Sundberg, is among those who filed claims.

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After high school in Williamsburg, he started his higher education journey in 2007 at Kirkwood Community College, where he earned an associate degree in architectural technology. He transferred to the University of Northern Iowa, but said he didn’t enjoy it and left to take some time off and work.

In 2012, hoping to resume his pursuit of a bachelor’s in project and construction management, O’Brien reached out to ITT Tech, having seen its ads and presence in Cedar Rapids.

During registration, O’Brien said, advisers told him his Kirkwood degree wouldn’t suffice and he would need an ITT associate degree before pursuing its bachelor’s program.

“I agreed only because I was given the chance to test out of a majority of the classes,” he said.

He earned the associate prerequisite in six months. But four months into the ITT bachelor’s program, O’Brien learned the degree he wanted no longer would be offered in Cedar Rapids. He would have to commute two hours to Clive to continue.

“I was rather angry,” he recalled.

Instead of remaining with ITT, O’Brien enlisted in the Army a short time later. Following basic training, he returned in pursuit of an ITT bachelor’s degree — after the school created an online path for it.

But two years later — in the last week of his capstone class — he learned he was missing a course necessary for graduation.

O’Brien was offered the option of trying to test out of that course or taking it and delaying graduation. But because he already had a project management job, he opted to take the class.

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“I intended to learn something new to better strengthen my knowledge,” he said. “But three days later, the school closed.”

O’Brien never received the ITT bachelor’s degree, even after taking out a private loan with a 9.8 percent interest rate and a student loan with a 6.8 percent rate.

And with the school’s closure and bankruptcy filing — along with a class-action lawsuit that landed more than $168 million in debt relief nationally for 18,664 former ITT students — the associate degree he earned there means little, O’Brien told The Gazette.

“ITT Technical Institute did nothing for me but take time and money,” O’Brien said.

O’Brien paid ITT Tech about $25,000, with about $15,000 in outstanding loans. He’s currently working with his lender to get some of the relief made available through a recent settlement with a credit union service organization that made loans for ITT students.

Iowa Attorney General Tom Miller last month announced $1.4 million in debt relief was on its way for 143 former ITT Tech students as part of the 44-state settlement.

Finkenauer’s proposal goes further, aiming to cancel the debt for any defrauded borrower and return to the borrower any payment on the predatory loans. Her staff said that the Education Department still would continue its pursuit to recoup losses from “bad actors.”

Kirkwood President Sundberg said she supports the bill, as does Iowa Attorney Miller, who in a statement said hundreds of Iowans have been waiting months and years for remittance. While he said his office has secured more than $11 million in debt relief or other assistance for Iowans who borrowed to attend ITT, Corinthian College or other for-profit schools, Miller said many are still waiting on loan forgiveness.

l Comments: (319) 339-3158; vanessa.miller@thegazette.com

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