Villalba et al. v. ITT

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.

Overview

Who is involved in this case?

The Project on Predatory Student Lending represents a group of former ITT Tech students who filed a claim against the estate of ITT in ITT’s bankruptcy proceedings. These former students sought to act as representatives of hundreds of thousands who attended and were defrauded by ITT Tech between 2006 and 2016. Along with the students, the CFPB and multiple state attorneys generals are parties in the bankruptcy proceedings.

 

Read more about one of our named plaintiffs in this case, Jorge Villalba, here. If you are a former student of ITT Tech, click here for information.

 

What is this case about?

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. In determining what would happen to the estate of ITT, it became clear that the students who had been preyed upon by ITT to build that estate needed to be part of the conversation. The Project intervened in ITT’s bankruptcy proceedings on behalf of former students, seeking to cancel the private student loan debt held by the estate of ITT.

 

Where and when was this case filed?

This case was filed in the southern district of Indiana on January 3, 2017.

What other business entity would I wait 5 years for an answer? It’s frustrating...You have U.S. citizens begging for help and I have been doing that for 1,714 days and I’m over it. I just want it fixed and I want to move forward.”

“Everything about ITT was a lie. And those lies didn’t just affect me, it has affected my entire family. Even with the federal loans cancelled, my credit has been severely negatively impacted. My mom is getting harassed by debt collectors threatening to garnish her wages and close her bank account."

Why this case?

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.

Despite extensive evidence of illegal behavior, the Department of Education continues to collect on the federal student loans that funded ITT’s fraud.

The Latest

On November 28, 2018 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 cancels $500 million in student debt supposedly owed to ITT, returned $3 million collected since the bankruptcy to former students, and gave students a $1.5 billion allowed claim against each bankruptcy estate.

On February 23, 2022, the Bankruptcy Court approved a plan for distributing money from the common fund to members of the student class, which includes anyone who attended ITT at any time from January 1, 2006, to September 16, 2016, as well as anyone who attended Daniel Webster College at any time from January 1, 2009 to September 16, 2016.  The details of the plan can be read here, in our motion to the court requesting approval of the distribution.  Payments to former students of ITT and Daniel Webster College should begin to be made later this year.  Former students should start receiving notices by mail and email in the coming weeks with information on how to confirm/correct mailing information and verify preferred payment methods.  For more information, please visit: www.ittstudentclaimsettlement.com

Case Updates

In Case You Missed It: A National Spotlight On ITT’s Fraud and Abuse | Blog

Just last week, Senator Dick Durbin of Illinois used his time on the Senate floor to bring the “Dreams Destroyed” report before his Congressional colleagues.

Student borrowers are keeping the pressure up in 2022 | Blog

In just three months of 2022, we’ve seen notable progress in the fight towards holding predatory for-profit colleges and those who enable them accountable. From a scathing report detailing ITT’s decades of wrongdoing, to students in Sweet v. Cardona calling out the growing borrower defense backlog, borrowers are not letting up and keeping the pressure on the Education Department’s arbitrarily long and winding road to justice.

Student Loan Truth: Gainful Employment Not Guaranteed | Blog

One topic that came up again and again during the Department of Education’s February Negotiated Rulemaking sessions was gainful employment of for-profit college graduates – or the lack thereof.

Case Documents

05/07/2019

Notice of Trustee's Motion to Compromise and Settle Adversary Proceeding Against the CUSO

The Trustee filed a motion to settle its lawsuit against the CUSO, a credit union service organization that the Trustee alleged to have aided and abetted ITT’s former management’s fraudulent conduct in connection with the CUSO student loan program. According to the Notice, any objection to the Trustee’s motion must be in writing and filed with the Bankruptcy Clerk by June 5, 2019.

08/17/2018

Student Claimants' Supplemental Brief in Support of Order 2004

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

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.

Coverage

When colleges defraud students, should the government go after school executives? | NPR

In a shocking investigation, the U.S. Senate declared the federal student loan program “plagued by fraud and abuse.” Its report heaped scorn on for-profit trade schools for serving 22% of federal student loan borrowers but accounting for 44% of defaults. “The school keeps the student aid money … and the student is left holding the bag with a poor credit rating, no job and no income to repay the student loan,” U.S. Rep. Marge Roukema, R-N.J., declaimed in her crusade against for-profit “bad apples.”

Read More

Report On Fraud Committed By ITT Technical Institute Highlights Need To Protect Student Loan Borrowers With Stronger Regulation Of For-Profit Colleges | Forbes

Last week the Project on Predatory Lending released an extensive report detailing abuses by the now-closed ITT Technical Institute (ITT Tech). The report details how ITT Tech systematically defrauded millions of students over decades, abused the federal financial aid system and left students weighed down with student loan debt and worthless credentials.

Read More

DeVry, ITT Tech students among thousands of defrauded borrowers to receive $415 million in loan cancellation | Washington Post

The Education Department said Wednesday that it will cancel the federal student loans of nearly 16,000 people defrauded by DeVry University, ITT Technical Institute and Minnesota School of Business/Globe University.

Read More