The abrupt shutdown of for-profit ITT Educational Services is having an impact on about 35,000 student who were taking classes associated with more than 100 campuses.
Many are now facing hefty student loan debt and the prospect of no degree after months or years of classes. Last week, the U.S. Department of Education prohibited ITT from allowing any new students to use federal loans to pay for ITT course. The school promptly stopped new enrollment.
Those ITT students who left the school within the last 120 days would be eligible to have federal loans for their ITT education forgiven if they want to start over at another school, Education Department officials said. These studens are legally entitled to have their federal student loans forgiven under a closed-school discharge. In order to qualify for this form of debt relief, students who want to continue their education must start all over again.
The Department of Education has set up a website, studentaid.gov/ITT. Officials are also providing Webinars for students to share information and address their concerns. The department is urging community colleges near ITT locations to accept academic credits from the career school.
“While officials at ITT Technical Institutes will be contacting students to inform them of their options, the U.S. Department of Education (ED) will be directly contacting via email currently and recently enrolled students to inform them of ITT’s closure and the options available to them,” U.S. education officials state.
Students can apply to have their federal loans discharged, or forgiven, if they can prove that the school used illegal or deceptive tactics in violation of state law to persuade them to borrow money for college. This is known as a “borrower defense to repayment.” The Obama administration has proposed an overhaul of this challenging process. It was rarely used until the 2014 collapse of for-profit chain Corinthian Colleges, which forced the Education Department address re-evaluate the standard used for reviewing appeals for debt relief.