If you attended the now-defunct ITT Tech, you’d now get a total student loan forgiveness on your student debt. This cancellation occurred after the U.S. Department of Education approved 18,000 claims of borrower defense to repayment.
In 2016, the parent company to ITT Tech, ITT Educational Services, filed for bankruptcy after it received numerous lawsuits. Here’s what you need to know about student loan forgiveness and what you can expect.
The U.S Education Department Grants Full Loan Cancelation To ITT Students
If you’ve been following the latest news on student loan forgiveness, then you’re probably aware that President Biden has canceled student loan debts worth $3 billion. And this cancelation includes the $500 million of ITT Tech student loan forgiveness.
Now, borrower defense to repayment is a federal law that allows loan borrowers to opt for loan forgiveness if a university or college misled them. You can also seek loan cancellation if your school got involved in misconduct in violation of specific state laws.
The federal department concluded that the institution deceived students about employment opportunities after graduation, including potential salaries that students could earn with their degree from ITT Tech.
Miguel Cardona, the Education Secretary, said that the action they took would give thousands of loan borrowers a new start. If your student loan relief is granted, you’ll get a notice from the Department of Education about the student loan forgiveness.
Who Qualifies For The ITT Tech Loan Forgiveness?
For now, the Biden administration is canceling student debt for 18,000 borrowers.
If you initially don’t get approved or after the federal authority makes the final decision on the pending claims, you can qualify for a student loan refund. According to a finalized lawsuit last year with the CFPB, 35,000 former ITT Tech students will get student loan relief.
However, if you want to know how to qualify for your loans discharge or receive a refund, you should meet some requirements. If you have federal student loans, you can be eligible to get a closed loan discharge if:
- You attended an ITT Tech college that closed, or the school closed borrower shortly after you stopped.
- You didn’t finish your study program.
If you qualify for discharge, you can get total federal student loans. However, you won’t be eligible if:
- You stopped ITT Tech school before May 6, 2016,
- You finished a program at another school, or
- Completed all your program coursework, even if you didn’t get a diploma.
If you have private student loans, you have similar loan forgiveness requirements. But there’s a high chance that a loan lender will contact you about your eligibility, and you won’t have to do anything yourself.
However, if you haven’t received a call from them yet, you may have to contact your loan lender to find out your options. You can also contact the CFPB to know how to get your student loan forgiveness.
Overview Of The ITT Tech Lawsuit
When ITT Tech filed for bankruptcy and shut down its schools in 2016, a lawsuit was filed. However, even after the institution closed down, thousands of students were still responsible for paying for their remaining student loans.
However, a lawsuit settlement in 2018 canceled $600 million that $750,000 students owed the institution. That lawsuit included students enrolled in the school from 2006 to 2016, including students who made monthly payments after the school filed for bankruptcy.
Federal student loans were forgiven under the loan forgiveness due to borrower defense to repayment. But, sadly, private student loans were not included, which means thousands of students still had to pay for their outstanding loans.
For example, borrowers were required to make payments to Navient even after the federal government forgave the federal loans. In June 2019, however, the CFPB got a settlement deal with ITT Tech that forgave private student loans worth $168 million.
CFPB reached another settlement in August 2019 that included a judgment against ITT Tech for $60 million. It also had an injunction that prevented the school from ever providing student loans again.
The CFPB reached an additional settlement in September 2020 that required ITT Tech to cancel $330 million in outstanding student loans. In all, ITT has canceled over $500 million in private student loans.
What To Do Next With Your Student Loans
If you’re experiencing any problems with your loan servicer, you can take several steps to ensure that it works in your favor. Let’s go through them.
- Review your student loan details. Whether you haven’t made payments for some time or you’re on autopay, you might not know what type of student loans you have or even what you’re on a hook for. But Navient services federal and private loans, so check what you have before you explore any alternatives.
- Find other options by yourself. Find other repayment options such as refinancing, loan forgiveness, or income-driven repayment plans. It’s necessary to know your options before you talk to your servicer. That way you can get informed about various offers.
- Ask your loan servicer for options. If you’ve completed your research by yourself, the next option is to contact your loan servicer. Ask them what you’re eligible for and how each option affects your repayment, and what you’ll ultimately repay over the loan life. If your servicer says that you don’t qualify for particular programs or offers you a more expensive alternative, that may be a red flag.
- File a complaint, if necessary. If you’re sure our servicer is causing you to pay a massive amount of money or misleading you, file a formal complaint. You can proceed with your state’s attorney general, your lender, or the federal level like the CFPB, U.S. Department of Education, etc. If you take this option, you’ll need a document to prove your case. Also, keep detailed records and notes of every phone call.
Overview Of ITT Loan Forgiveness
If you went to ITT Tech and have any remaining student loans, you can be eligible for a discharge, cancellation, or refund. But that’ll depend on your program and loan status. For most people, the PEAKS Trust will notify them, and that may include you too. (The PEAKS Trust is the school’s private student loan program.)
Another alternative is your loan lender contacting you if you qualify for the loan forgiveness. In most cases, you won’t have to do anything. However, if you haven’t heard of any of these services, we recommend that you get in touch with your loan servicer.
Your servicer should be able to show you the process and know if you qualify for relief. And if you do, how much relief you’ll get. If you have private student loans and don’t get any assistance from your loan servicers, you can contact a lawyer or the CFPB.
If you don’t get help from your servicer, you can complete a closed loan discharge or a borrower defense to get help from your federal student loans. You may also qualify for a state tuition recovery fund, but that will depend on your status and school.
If you qualify for student loan forgiveness via borrower defense to repayment and have already sent an application, you should get a notice from the federal department in a couple of weeks.