As you may have heard, ITT Technical Institute recently closed its doors, leaving thousands of students nationwide stuck in “no man’s land”. The closing occurred because the Department of Education ruled that ITT could not accept any new students who used federal loan funding. The Department of Ed also required ITT to set aside almost $250,000,000 in the event that it closed its schools. These sanctions were essentially a death knell for the school.
Where does that leave you as a student? Well, you have a couple of choices. You can see if your ITT credits transfer elsewhere and continue with your education that way. Most schools will not accept these credits, but, there are some that will. The alternative is that you would have to start a new program at a new school. As you can see, neither alternative is especially appealing.
What about the student loans that you took out to go to ITT? Well, there are two types of student loans, Federal and Private. For your federal loans (Direct Loans, Federal Family Education Loans ((FFEL) or Perkins Loans), you may be eligible to have them discharged because the school closed its doors. The key to this type of discharge is that it must be one that prevented you from completing your degree. In other words, the credits are useless. For those of you who do transfer to a school that accepts the ITT credits, this discharge likely will not be available to you. For those of you who cannot find an acceptable school that would accept your credits, this discharge may be a way to remove the burden of trying to repay those loans. Unfortunately, for private loans, there is no type of discharge available unless your lender specifically has one as part of its loan package. This is going to create a terrible burden on those affected by this massive closure.