Villalba et al. v. ITT

Overview

On January 3, 2017, a group of former ITT Tech students filed claims in ITT’s bankruptcy proceedings in the Southern District of Indiana. They sought to act as representatives of hundreds of thousands who have been defrauded by ITT. The students filed over a thousand pages of first-hand accounts from students who attended ITT, affidavits from several whistleblowers, and evidence developed in state and federal law enforcement investigations in addition to their legal documents. Along with the students, the CFPB, and multiple state attorneys generals are parties in the bankruptcy proceedings.

Information for Former ITT Students

If you are a former student of ITT Tech, please visit this page for information and to sign up for updates.

Background

ITT Tech was one of the country’s largest for-profit college chains. Over the past decade alone, it took in over $11 billion in revenue, 98% of which came from tuition, and 76% of which came from federal student aid. Headquartered in Carmel, Indiana, it grew at incredible rates after becoming a publicly traded entity in 1999, and came under increasing scrutiny for its recruitment practices. ITT was featured prominently in the Senate HELP Report of 2012, which detailed consumer fraud and misuse of federal funds at many for-profit colleges around the country. By the time it declared bankruptcy in late 2016, ITT had been subject to lawsuits by numerous state and federal enforcement agencies, as well as multiple whistleblowers

In 2016, the Department of Education cut off federal student aid to ITT. Because almost all of ITT’s revenue came from federal student aid, it declared bankruptcy weeks later. Despite extensive evidence of illegal behavior, the Department of Education continues to collect on the federal student loans that funded ITT’s fraud.

Case Updates

Update | ITT Students’ $1.5 Billion Bankruptcy Settlement Approved by Judge

On Wednesday, November 28, the judge in the ITT bankruptcy case gave final approval to the settlement between the student class and the estate of ITT. The settlement is a big victory for former ITT students who were defrauded by the school and provides important relief.

Update | ITT Students’ $1.5 Billion Settlement Heard by Judge In Bankruptcy

Today, former ITT students proposed a $1.5 billion settlement claim in bankruptcy court that would cancel more than $500 million in debts. All participants in the case and members of the class have until April 24 to submit their views of the settlement with the court before it is heard for final approval on June 13.  This is good news for former ITT students, but there is still a long way to go.

Update | Proposed Settlement to be Heard January 24

A year ago former ITT students filed a complaint against ITT and a class Proof of Claim in the ITT bankruptcy case. In this last year we have worked hard to fight on behalf of the Student Class, including urging the Trustee to stop collection on all debt owed directly to ITT.

“One employer told me that he had plenty of applications from potential candidates that had ITT Tech on their resume and that he would immediately discard those applications because he didn’t consider ITT Tech a real college.”

Former ITT Tech Student

“After graduating from ITT, I struggled with the stigma of having their name on my resume and I have gotten further with certifications than with having my degree on my resume. I have found that when ITT is mentioned most employers will frown upon it because of the previous employees they have had from ITT.”

Former ITT Tech Student

“When I graduated they made it seem like they would help me find a decent job. When in fact all they would help me get was jobs through a temp agency. When I started work I worked next to a kid who didn't even have a high school diploma. Made it seem like I wasted my time going to school I could have got the job with out them."

Former ITT Tech Student

Case Documents

07/12/2018

Notice to Potentially Affected Individuals Regarding Trustee's Disclosure of Protected Information

On July 11, 2018, the Judge granted a Protective Order filed by the Trustee describing the process by which access to certain documents, including student and business records, can be obtained.

07/12/2018

Proposed Protective Order

Protective order filed by the Trustee describing the process by which access to certain documents, including student and business records, can be obtained.

08/17/2018

Student Claimants' Supplemental Brief in Support of Order 2004

Student Claimants filed a supplemental brief requesting documents under rule 2004.

Coverage

Dept. of Education to Cancel $150 Million in Student Loan Debt | NBC News

The U.S. Department of Education announced Thursday it would automatically cancel $150 million in student loans connected to for-profit colleges that closed in recent years. The move was made under an Obama-era policy that a federal judge in October essentially forced U.S. Secretary of Education Betsy DeVos to implement. The story was first reported by Politico.

Read More

Former ITT Tech Students Get $600M in Debt Relief from Bankruptcy Judge | Indianapolis Business Journal

While the bankruptcy fight over failed for-profit educator ITT Educational Services continues, the biggest group involved in the legal battle has scored a big victory. In late November, a federal bankruptcy judge in Indianapolis gave final approval to a $600 million settlement that will affect about 750,000 former students of ITT Technical Institute.

Read More

ITT Tech Students Score Victory in Bankruptcy Settlement | Washington Post

As creditors of ITT Educational Services fight over the remaining assets of the defunct for-profit college operator, one group has secured a significant victory in the bankruptcy proceedings: former students. On Wednesday, a federal judge gave final approval to a settlement that will erase nearly $600 million that 750,000 students owed ITT Technical Institute. The agreement, which was first announced in January, will also refund $3 million that students paid the for-profit chain.

Read More