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 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.

Update | ITT Trustee to Stop Collection on All “Temporary Credit” Accounts

On May 18, the court overseeing ITT’s bankruptcy case approved a motion to stop collection on all ITT “Temporary Credits.” ITT used unfair and deceptive tactics to get students to sign up for Temporary Credits, including by describing Temporary Credits as grants and threatening to expel students if they did not agree to the debt. Even after ITT filed for bankruptcy, its servicers and debt collectors continued to harass students to collect these Temporary Credits.

“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

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.

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.

Coverage

These For-Profit College Students Hope for Debt Relief as a Debate About Their Loans Rages in Washington | MarketWatch

Seth Pontiff has been waiting for three years to hear whether the $80,000 in loans he took out attending ITT Technical Institute — a for-profit college that closed in 2016 amid allegations of false advertising — will be discharged by the government.

Read More

DeVos Proposes to Curtail Debt Relief for Defrauded Students | New York Times

Education Secretary Betsy DeVos proposed on Wednesday to curtail Obama administration loan forgiveness rules for students defrauded by for-profit colleges, requiring that student borrowers show they have fallen into hopeless financial straits or prove that their colleges knowingly deceived them.

Read More

SEC’s $300,000 ITT Settlement Leaves Trail of Questions | Indianapolis Business Journal

The Securities and Exchange Commission came at ITT Educational Services Inc.’s two top executives with guns blazing three years ago, declaring that CEO Kevin Modany and Chief Financial Officer Daniel Fitzpatrick “engineered a campaign of deception and half-truths.”

Read More