The Department of Education has been pressuring ITT Technical over issues that impacted the schools ability to be eligible for federal student loans. In response, ITT has shut their doors to new students and left current students in a lurch.
While ITT Technical says “Endless Possibilities” as of today, one of those possibilities is not being able to enroll as a new student.
So what happens to students who are or have attended ITT Tech in pursuit of a degree? Well it is very unlikely that credit earned will transfer to a new school. How do I know that, ITT Tech says so. But students considering a transfer of credit to some other school should do that yet. Keep reading to learn why.
While the final disposition of ITT Technical has yet to be announced by the company, the prognosis doesn’t look promising for students and staff.
On August 25, 2016 the Department of Education advised ITT Technical that “We have been continuing to monitor civil litigation filed against ITT by federal and state law enforcement agencies.” – Source
Do to increased risk and facing the withdrawal of the schools accreditation by the Accrediting Council for Independent Colleges and Schools, the security deposit required by the Department of Education was raised.
The Department of Education advised ITT Technical they had 30 days to deposit an additional $152,938,654 to secure their ability to continue to receive federal student loan funds. The stated purpose of these and other previously deposited funds was to protect the Department of Education should “the institution precipitously close or terminate classes at other than the end of an academic period.” The security deposit would also be available for refunds or other obligations to the Department of Education if the school failed.
The U.S. Department of Education puts the blame for this mess squarely on the shoulders of ITT Tech. The Department of Education says, “In recent years, ITT Educational Services, Inc. (ITT) has increasingly been the subject of state and federal investigations and this year it has twice been found out of compliance with its accreditor’s standards. Over time, ITT’s decisions have put its students and millions of dollars in taxpayer funded federal student aid at risk. In response, over the last couple of years, we at the Department of Education have increased our financial oversight over ITT and required the school to boost its cash reserves to cover potential damages to taxpayers and students.”
If you are a current student and have just completed or in the process of completing your ITT Technical degree and you owe federal student loans, those loans may be eligible to be forgiven under the closed school discharge.
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But to be eligible for this discharge of your federal student loan debt you must meet either of these criteria:
- Your school closes while you’re enrolled, and you do not complete your program because of the closure. If you were on an approved leave of absence, you are considered to have been enrolled at the school.
- Your school closes within 120 days after you withdraw.
Another strategy some will talk about to deal with federal student loan debt from ITT Technical is the evolving Borrower Defense repayment program to eliminate debt if the student was defrauded.
However, the Department of Education is laying groundwork to not accept this reason not to pay or have loans forgiven. As the Department of Education says, “The actions we’re taking against ITT today are based on the operational and financial risk they pose to students and taxpayers, not on a finding that they defrauded students. There are, however, a number of open federal and state investigations into ITT campuses. If those investigations find evidence of fraud or other illegal behavior surrounding your specific program, you might be eligible for relief.”
So as of the day I’m writing this, it is too early to tell is the school will be found to have behaved fraudulently and thus allow all students the ability to have their ITT loans forgiven.
None of these potential strategies for dealing with ITT Technical student loan debt apply to any private student loan debt owed. Those students are basically out of luck at this time when it comes to relief from those debts unless they pursue some other legal remedy.
If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.