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.
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.
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.”
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.
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 the bankruptcy estate. The bankruptcy case is ongoing.
Statement on Extended Closed School Discharges for ITT Borrowers | Press Release
Today, the U.S. Department of Education announced that it will make $1.1 billion in closed school discharges available to an additional 115,000 borrowers who attended the now-defunct ITT Technical Institute (ITT). According to the Department, this segment of borrowers includes those who did not complete their degree or credential and left ITT on or after March 31, 2008.
How Long Would You Wait to Get Your Life Back? An ITT Student Loan Truth | Blog
Predatory for-profit colleges like ITT have defrauded students for years, targeting low-income families and intentionally making the enrollment process fast-paced and confusing because their goal is to make as much money as they can with as little return as they can offer. Students are then left with thousands of dollars in debt and worthless degrees.
FAQ: What We Know About ED’s Recent ITT Announcement
Recently, the Department of Education announced that it will approve a small portion of borrower defense applications for former ITT students, with 18,000 borrowers to receive a 100% discharge of their ITT debt. While this is great news for those select borrowers, there are still a lot of questions around what this means for the more than 700,000 former ITT students who were scammed by the school.
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.
Student Claimants' Supplemental Brief in Support of Order 2004
Student Claimants filed a supplemental brief requesting documents under rule 2004.
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.
Former Students of Defunct ITT Tech Receive $95.1 Million Loan Relief | Wall Street Journal
WASHINGTON—The Education Department is providing loan relief to some 7,800 former students of the ITT Technical Institute, with debts totaling $95.1 million being forgiven by the government years after the giant for-profit school chain closed. The department said that it has identified 7,878 former students of ITT Tech as eligible for a program in which loans are discharged automatically within three years of a school closure. Of those borrowers who attended the school, 7,697 had received loan forgiveness as of Jan. 3.
Defrauded college students will no longer be taxed on their canceled loans | Washington Post
Student loan borrowers whose education debt has been canceled because their college closed or engaged in fraud will no longer face a tax bill, relief that arrives as applications for forgiveness continue to grow. On Wednesday, the Internal Revenue Service issued guidance shielding borrowers from having their discharged federal and private loans treated as taxable income. The measure is effective for education loans canceled on or after Jan. 1, 2016. Anyone affected by the new policy may claim a credit or refund for an overpayment of taxes.
Former for-profit college students will have $168 million in student debt cancelled | MarketWatch
More than 18,000 students who attended a now-defunct for-profit college will have $168 million in private loan debt discharged. The loan cancellation is part of a proposed deal between the Consumer Financial Protection Bureau, attorneys general of 43 states and the District of Columbia and Student CU Connect (or the CUSO), a company that held and managed private loans taken out by students at ITT Tech.