ITT Technical Institute closed down in early September, leaving more than 35,000 students without a school, and leaving thousands of employees without a job. Following the closure, the company filed for Chapter 7 bankruptcy in Indiana. ITT Tech is the second major for-profit college that has filed for bankruptcy in the past two years. Corinthian College filed in May 2015.
ITT Tech Barred From Accepting Student’s Federal Aid
ITT Tech blamed the closure on new requirements imposed by the U.S. Department of Education. In August, the agency barred ITT Tech from enrolling new students using federal financial aid. ITT Tech relied heavily on federal financial aid for its funding. When announcing this action, the Department pointed out that ITT Tech had been twice found out of compliance with its acceditor’s standards in 2016 alone. In the Department’s eyes, this put the students and millions of dollars at risk.
Additionally, in June the Department of Education set a requirement that ITT Tech’s parent company post a letter of credit in an increased amount of $123 million to provide a cushion against possible closed school loan discharges, and to protect taxpayers and students.
Options for ITT Tech Students
If you were a student at ITT Tech, you have a couple of options going forward. First, you can apply for a student loan discharge. If you were attending ITT Tech when it closed, or had recently withdrawn from the school before it closed, you may be eligible for the discharge. If you receive a school loan discharge, you will be under no obligation to repay the loan. You will also receive a reimbursement of payments made on the loan and the discharge will be reported to credit agencies.
If your goal is to receive a degree in the program you have been working in, the better option for you might be to transfer your credits to another institution. If you discharge your loans, you cannot use the credits earned toward a comparable program and will have to start all over.
The U.S. Department of Education has an ITT information website that it is frequently updating. This website is a wealth of information on the options provided to ITT Tech students. The Department is also offering webinars to share information and address students’ concerns.
The closing of a school and employer such as ITT Tech has a great impact on many people’s lives. If you have been left in a dire financial situation because of the closing of your school or employer, please contact one of our offices today to schedule a free, confidential appointment to meet with one of our attorneys.