With the recent, sudden closing of all ITT Technical Institute locations, the Student Loan Ranger has been receiving many worried emails from current, recent and not-so-recent students wondering how to move forward. This month’s mailbag will focus on those issues.
Below are some recent messages we’ve received. The following questions are real but may have been edited for grammar or clarity. If you have a question the Student Loan Ranger can help with, please reach out to us at studentloanranger@usnews.com.
[See how to avoid turning into a scary student loan statistic.]
Bogus Degree?
Q: I have a bogus degree from ITT and about six or seven thousand dollars in student loans. Can I get some help? How do I prove they committed fraud against me? The labs hardly ever worked properly and that is the “hands-on” they boasted about and promised. I gave up looking for a job when my bachelor’s degree didn’t help me get a decent job.
A: I’m sorry to hear about your college experience. At this time, you would not be eligible for discharge based on the situation you describe.
In general, unless the school actually makes such a promise, there is no guarantee of employment or salary threshold when you take on debt to attend school. Failure to obtain a job, or a certain type or level of job, is also usually not a reason for loan forgiveness unless the school promised such a thing.
The exception to that is if the school violates state consumer protection laws, in which case federal student loan borrowers can file for a borrower defense to repayment discharge. Although several students and the Massachusetts Attorney General’s Office have filed lawsuits alleging such violations against ITT, as of this publication, the school has yet to be found guilty of such abuses in court or by another government agency.
[Learn three ways a student loan could be discharged.]
With that said, keep an eye on this space because changes are coming. As we discussed this past summer, the Department of Education is working on expanding the eligibility criteria for borrower defense to repayment discharges.
If the final regulations are anything like the draft and you, the Department of Education, a court or another agency can find proof that ITT misrepresented its program to you, it’s possible you might be eligible for full or partial discharge of your federal student loans if you consolidate them after the new rule takes effect July 1, 2017.
One last caveat is the statute of limitations, which based on the draft regulations, will apply in some cases to amounts that the borrower already paid either voluntarily or involuntarily.
Loan Discharge or Finish School?
Q: I am — or was — an ITT student who was attending when it closed. What do I do now? I’ve heard all my loans will be forgiven.
A: What do you want to do? I hope it’s to complete your degree or certificate.
While it may be tempting to pursue student loan discharge, which it sounds like you’d be eligible for under closed school provisions, remember that you can’t get back the time you spent racking up those credits or hours.
[Here are three times college closings can affect student loan repayments.]
If you discharge your loans through closed school discharge, that means you cannot use those credits toward a comparable program of study, so — essentially — you’ll have to start all over again. Studies show that students who complete their degree have fewer problems with student loan repayment and other financial achievements.
To determine which schools are accepting ITT credits and how to obtain your transcript, check out the ITT information site that the Department of Education is hosting and frequently updating.
Incidentally, the Student Loan Ranger recommends that every ITT student, regardless of when they attended, look into obtaining a copy of their transcript now in case you need it down the line.
To be eligible for closed school discharge, you would have had to have been attending — or on an approved leave of absence — within 120 days of the school’s closure date of Sept. 6, 2016, and unable or unwilling to transfer your credits to a comparable program. If you decide to pursue this discharge, you can apply directly through your loan holder.
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Student Loan Questions: Information for ITT Tech Students originally appeared on usnews.com
