The school year is over for 45,000 ITT Tech students before it even began, as the school’s parent company announced it will shutter all 137 ITT Technical Institute campuses in the U.S. However, roughly 35,000 of ITT’s 45,000 students will be eligible for some form of student debt relief, according to the U.S. Department of Education (ED).
Students of schools that abruptly shut down have a few different routes they can take to continue their education and have their student loan debt forgiven.
Here are three options:
Filing for a Federal Loan Discharge
A federal loan discharge would wipe away any federal loan debt incurred while attending ITT Tech. You should continue making payments on your student loans while your discharge status is being determined, the ED recommends. If you miss payments, they could go into default and negatively impact your credit history.
Transferring credits to a new school
It’s likely some students will want to transfer their ITT Tech credits to another institution and continue their education. But it's important to know that transferring credits can impact their eligibility for potential student loan relief.
"If a student goes to the same program, then there wouldn't be any discharge,” Department of Education Under Secretary Ted Mitchell said on a call with reporters Tuesday.” But if a student were to transfer into a different program then they are likely eligible for a discharge."
Filing a Borrower’s Defense Claim
In order for a claim to be successful, the student must prove the institution committed fraud.
The ED is still investigating ITT Tech for evidence that it defrauded students in some way. But until those findings are finalized, the burden of proof will be on students, who will have to come up with their own evidence of fraud in order to file a claim.
For more detail on eligibility and the pros and cons of each of these options, see this article on MagnifyMoney.
MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.
