What alumni need to know
Former students who attended the ITT Technical Institute – or ITT Tech – may be able to have some or all of their student loans wiped out, thanks to a new rule against the for-profit school, now defunct.
ITT Educational Services – the parent company of ITT Tech – filed for bankruptcy in 2016. But many students ended up with millions of dollars in student loans for a school they no longer attend. Last year, ITT Tech settled a lawsuit with the Consumer Financial Protection Bureau (CFPB), guaranteeing that 35,000 former students will have their student loans wiped out.
Here’s what the lawsuit says and which students can benefit from the settlement.
Presentation of the ITT Tech trial
Although ITT Tech filed for bankruptcy in 2016, hundreds of thousands of students were still forced to pay off their delinquent student loans. However, the settlement of the lawsuit in 2018 allowed 750,000 students to have their debts written off.
This lawsuit helped students who attended ITT Tech from 2006 to 2016, as well as other students who made payments after the company went bankrupt. Under the settlement, federal student loans were released, thanks to the “borrower’s defense” rule, which protects borrowers whose schools have misled or engaged in misconduct.
However, private student loans do not offer this protection, leaving thousands of students still responsible for paying their loans. For example, Navient still demanded payments even after the government released federal student loans and found ITT Tech guilty of fraud.
In June 2019, CFPB struck a deal with ITT Tech that disbursed around $ 168 million in private student loans. In August 2019, the CFPB reached a further settlement, including a judgment against ITT for $ 60 million and an injunction prohibiting ITT from again offering student loans.
In September 2020, the CFPB reached yet another settlement, forcing ITT to write off $ 330 million in outstanding student loan balances. In total, ITT Tech has written off over $ 500 million in private student loan debt.
Who will get an ITT Tech refund?
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To see if you are eligible for your loan release or repayment, you must first see if you meet certain conditions.
For federal student loans, you are entitled to receive a closed loan discharge if:
- You attended an ITT Tech school that closed (or it closed shortly after your withdrawal).
- You have not completed your study program.
This allows you to pay off up to 100% of your federal student loans.
If you withdrew from ITT before May 6, 2016, completed a program at another institution, or completed all courses in your program (even if you did not graduate), you do not are not eligible to get your loans. dump.
If you have received your diploma but believe you have been defrauded by ITT Tech, you may be eligible for defense of the borrower. The program has been plagued by delays and outright refusals of relief in recent years, but the Biden administration recently announced that it will make forgiveness easier for eligible borrowers. The move is expected to affect 72,000 student borrowers whose borrower’s defense requests have been approved but not met.
Private student loan borrowers have similar loan forgiveness requirements, but chances are a lender will contact you regarding your eligibility and you won’t have to do anything on your own. However, if you haven’t heard from anyone, you may need to contact your loan manager to review your options. You can also contact the CFPB to see how to get relief.
If you attended ITT Tech and have outstanding student loans, you may be eligible for cancellation, discharge, or refund, depending on your loans and the status of your program. For most borrowers, you will be notified by PEAKS – a private student loan program that manages ITT Tech – or your loan manager if you are eligible for student loan forgiveness. In most cases, you won’t have to do anything.
If you haven’t heard from anyone, you should contact your loan officer. Your service agent should be able to walk you through the process and know when you went there, if your loans are eligible for relief, and how much you are entitled to.
If you don’t get any help from your loan manager, you can fill out a borrower defense form or closed loan discharge to get help with your federal student loans. You may also be eligible for a state tuition recovery fund, depending on your school and your status.
Private student loan borrowers who do not receive assistance from loan managers may want to contact the Consumer Financial Protection Bureau or a lawyer.