To many, it happened out of the blue: on September 6th, 2016, nearly 50,000 students received emails notifying them that ITT Tech Institute was closing down every one of its 137 campuses across the country, this will help you in loan discharge. Though many of these students were taken by surprise, ITT Tech’s decision to close is the result of a two-year battle against accusations of fraud, poor performance, and dishonest marketing.
ITT Technical Institute was a for-profit that marketed itself as an efficient academic opportunity for students who did not want to go through the more standard college experience. Various organizations have questioned the school’s credibility over the past several years. The nail in the coffin, however, was a decision made by the United States Department of Education: in August, the department issued a ban on ITT Tech. Simply put, this ban meant that no student could use federal financial aid dollars to pay for an education at any ITT Tech campus. ITT Educational Services, Inc. (the corporation that owns all 137 campuses) has explicitly stated that the federal government’s actions were the sole reason for their decision to close. They also described the Department of Education’s actions as, “inappropriate and unconstitutional.”
For former ITT Tech students, who received no warning, the campus’s sudden closure feels like a disruption at best and a disaster at worst. Regardless of whether or not the federal government made the right choice, students now have to figure out their next course of action. While it is too late to do anything to save the institution itself, its ex-students still have several options they can take to ensure that they can easily complete their education, minimize the damage done to their wallets, and possibly even have some of their student loan debt forgiven.
What Options Do ITT Tech Students Loan Discharge Have?
Those affected are uncertain about their futures. Now that the campuses have closed down, they are left with two problems to solve: how can they finish their education, and what can they do about their student loan debt? Understandably, many students are overwhelmed—and many, who are wary after feeling they have been led astray, are skeptical of the options offered them.
While it may be tempting to abandon your education, eschew civilization, and move to the woods to subsist on berries and squirrels, it isn’t your only option. According to the Department of Education, most of ITT Tech’s former students are eligible to receive some sort of relief from the burden of their student loan debt. There are several ways to go about this. The two best options, described in detail below, are to apply for student loan forgiveness, by filing for a federal loan discharge, or to transfer your credits to a new school.
1. Student Loan Forgiveness (File for a Federal Loan Discharge)
This option is only applicable for students with federal loan debt; unfortunately, none of your privately held loans are eligible for forgiveness as a result of ITT Technical Institute’s closure and bankruptcy. If you have quite a bit of federally held student loan debt, however, listen up.
Almost all of the student loan debt that was taken out to pay for classes and degree programs is eligible to be forgiven by the federal government under the recently revealed ITT Tech Student Loan Discharge program. This is only the most recent manifestation of the U.S. government’s Closed School Discharge program, which has been around for quite some time.
What does it mean to receive a federal student loan discharge? If your application is accepted, the U.S. government will erase all of the federal loan debt you have accumulated while attending any ITT Tech campus. This means that you will no longer have to make future payments on your loans—and that your past payments, whether they were voluntary or not, will be refunded. If those loans have led to poor credit, this process will also erase all adverse credit history related to the discharged loans.
How do you know if you are eligible for ITT Tech loan discharge? Fortunately, the requirements are fairly simple.
Firstly, you must have outstanding debt—federal student loan discharges can apply to Perkins Loans, Direct Loans, and FEEL Loans. If you were enrolled in classes at the time that your school was shut down, which means that you can no longer complete your degree program, you are eligible for federal student loan discharges. Receiving some sort of certificate or diploma does not disqualify you as long as you have not completed the program.
You are also eligible if you happened to withdraw from ITT Tech’s program within 120 days before the school’s closure. You are not eligible to receive a discharge if you have already completed your degree or if you withdrew from ITT Tech outside the 120-day window.
If you meet these requirements, your work is half done. The next step is to submit a closed for-profit school loan discharge application, which can be found at studentaid.ed.gov or requested directly from your loan servicer. Most services will accept applications via email or snail mail, but to be sure, you may want to contact them and ask. Once you have submitted your application, it’s just a matter of waiting to hear whether or not it was accepted.
If you are not sure who your loan servicer is, you can find out by calling 1-800-FED-AID, or by logging in to your studentaid.ed.gov account.
Important: while you wait to hear whether or not your application has been accepted, continue making payments as usual. Missed payments can have a poor effect on your credit—and, if for some reason you are deemed ineligible for a discharge, this can cause big problems down the road.
Also important: if you receive a federal student loan discharge, you will lose all of the credits you earned at ITT Tech. If this is unacceptable for you, option two may be your best bet.
2. Transfer your credits to a new school.
Many students put months or years of time and effort into their education at ITT Technical Institute. For those students, the idea of transferring their credits to another school to continue their degree program as seamlessly as possible is an appealing one. The good news is that this is entirely possible—you can hold onto the credits you earned at your ITT Tech campus and transfer them over to a school with a similar program.
This is easier said than done; in order to make sure you make the best use of your credits, you will have to work with your chosen school to ensure that they approve your coursework. Since ITT Tech’s credibility has been damaged in recent years, many schools may not consider some portion of your credits to be transferable. The U.S. Department of Education is in the process of collaborating with school officials and state licensing agencies to determine how best to handle these displaced transfer students. They are also working with community colleges surrounding various ITT Tech campuses to encourage them to accept all or most of the former ITT Tech student’s transfer credits.
In addition, ITT Technical Institute has formed articulation agreements with a handful of other schools, which may make it easier to receive credit for your coursework. Some of these campuses include the University of Phoenix, Orlando Medical Institute, Kaplan University, Devry, and West Coast University. For a full list of articulation agreements, go to http://itt-tech.info/about/education-options/.
For students looking to transfer, many transcripts (as well as grades for the last quarter) are still available via the student portal. Having difficulty finding your transcript record? Several campuses have agreed to store all former student records with state licensing agencies. If you are having difficulty getting your hands on your records from one of the recently closed campuses, try getting in touch with the state licensing agency where the school was once located.
It is important to add that transferring your ITT Tech credits to another school will likely impact your eligibility for federal student loan discharge. This depends largely on whether or not you continue to pursue the same degree. If you studied business at ITT Tech, but you choose to pursue philosophy at your new school, you may still be eligible for a full student loan discharge. If none of your ITT Tech credits are transferred over, you can still receive a federal student loan discharge.
If you continue working on the same degree, however, you will likely be ineligible to receive relief—even if many of your credits fail to transfer. That’s why this choice is a bit of an all-or-nothing gamble.
This issue is more common than students would like to imagine, so it is imperative that you make sure that the majority of your credits are transferable before choosing this option. Unless you were very close to finishing your degree program, it may behoove you to opt for the federal loan discharge instead. That way, you will get a full refund, and you will not be saddled with paying for useless ITT Tech credits that no other school will take.