ITT Technical Institute was once one of the most prestigious educational institutions. It has provided education services for more than 35000 students since 1969. The school had more than 8000 employees across its 137 campuses when it closed in 2016. The closure of ITT Tech created a ripple effect that affected many people. Some people lost their jobs while students were left with huge debts for an education. The government offered some options to help students get rid of their debt. It is not possible to help all students because they have different loans. Here in this article we are going to guide you about ITT Tech student loan forgiveness options.
ITT Tech News Update
Biden supports loan forgiveness as part of his student loans plan. He discussed loan forgiveness programs like Public Service Loan Forgiveness or Borrower’s Defense to Repayment in his “Education beyond High School” plan.
He emphasized the fact that many students are victims of deceitful schools and lie. He suggested that the Borrower’s Defense to the Repayment program be improved, which assists such borrowers in eliminating their debt.
He forgave $2.3 million in student debt to students who were misled by schools under the BDR program earlier this year. ITT Tech student loan borrowers will be eligible for another round of loan forgiveness, worth $500,000. This debt cancellation opportunity will allow approximately 18,000 borrowers to start over if they are struggling with debt.
Soon, the Education Department is going to determine which borrowers are eligible and will send notices regarding the forgiveness benefit. These borrowers will receive 100% loan forgiveness.
Apply for BDR immediately if you feel ITT Tech misled you regarding education quality, accreditation credit transferability, or other education-related issues.
It suffices to show the fraud by providing evidence such as transcripts, contracts, emails, and brochures with false ads.
For more information, please refer to the section on Borrower’s Defense to Repayment in this guide. Or call us today for a debt-free tomorrow.
What happened to ITT Tech?
ITT Tech was in trouble long before it closed its doors in 2016. The school was the subject of numerous lawsuits. The principal reason for the lawsuits was the questionable loan programs offered by ITT, PEAKS, and CUSO.
These loans were originally intended to assist students during the 2008 financial crisis. However, they quickly became obsolete. Students struggled to repay the loans, which became an expensive source of funding. Some students also claimed they were forced to take out loans.
The Securities and Exchange Commission 2015 claimed that ITT Tech was involved in fraud. According to the claims, ITT Tech distributed private loans PEAKS & CUSO to students even though they were not eligible. Students couldn’t repay the debt as a result. ITT Tech, however, guaranteed the collection via loan pools.
ITT Tech should have used large amounts of guarantee loan payment if loans defaulted. According to some reports, officials paid for student loans in order to prevent them from defaulting. They hid poor loan performance from investors, it was claimed.
Education Department’s Response
ITT Tech also ran the risk of losing accreditation. Accreditation Council demanded that the school prove it was worthy of accreditation. The Education Department knew that the government would spend a lot on ITT Tech Student loan forgiveness opportunities if the school was not accredited. The Education Department ordered the school to issue a new credit card letter, worth $247 million.
Credit letters are an instrument that shows the bank account where this money is kept. The ED can trust that the school will have money in a bank account to protect taxpayers and students from any negative consequences. The problem was that $124 million in credit letters had already been provided by the school. A second letter placed the school in a financial crisis, leading to its bankruptcy.
ED was blamed for closing the school. However, ED justified their decision by pointing out that they had a responsibility to protect taxpayers and students.
ITT Tech Student Loan Forgiveness
Many people enroll in school hoping that their degree will lead to further employment opportunities. It is therefore understandable how devastating school closing news can be.
Yes, there were options available for students. Credits could be transferred to other schools or forgiveness of incurred debt. These options did not make up for the effort and time wasted. Not all students are qualified to take advantage of the opportunities.
There are many options available to you if you want to get rid of ITT school debt.
- Closed Schools Discharge – Due to Closure
- Borrower’s defense to repayment – fraudulent activities
Many other graduates have graduated years before them and were not eligible for programs because of closure. They can still benefit from:
- Public Service Loan Forgiveness
- Other Forgiveness Options
- Income-Driven Repayment plans, etc.
Let’s now examine each program.
Closed School Discharge
ITT Tech filed Chapter 7 bankruptcy in 2016 to end its operations. This made it possible for students to receive Closed Schools Discharge. Students who were enrolled at ITT Tech on or after May 6, 2016, are eligible for the ITT Tech Student Loan Forgiveness Program. This forgiveness option is highly sought-after because it provides 100% debt elimination.
This program has its downsides. It does not cover the federal debt. A student who transfers credits to another school will not be eligible for Closed School Discharge.
Closed school discharge usually occurs automatically. If the school closes, the student will be notified.
Repayment: The Defense of the Borrower
Closed school discharge is a straightforward program. Borrower’s Defense to Repayment is a more complicated option. The program requires that you prove your case with evidence. Second, very few students were able to eliminate their student loans through Borrower’s Defense in the last year.
You can watch the video to see how to apply for Borrower’s Defense to Repayment and increase your chances of loan forgiveness.
This program does not cover Perkins loans or FFEL loans. To be granted forgiveness, students must prove that they were misled by the school. Students should prove to the Education Department that the school didn’t engage in fraud so they wouldn’t choose to study there or go into debt.
If school officials lie about the job replacement rates, the true cost of education, or education qualification, it is a great opportunity for ITT Tech Student Loan Forgiveness.
Public Service Loan Forgiveness
Many borrowers want to know what their options are if they have graduated prior to the closing date. We will also consider other ITT Tech student loan forgiveness options in this section. These programs are available to you if you don’t qualify for the above-mentioned loans.
Public Service Loan Forgiveness removes any remaining debt after 120 qualifying payments. The rest of your debt can be forgiven if the loan is repaid within ten years. The eligibility criteria for this program can be difficult.
This program is open to all public servants, as the name implies. This opportunity is available to employees of governmental institutions, including federal, state, and local governments, as well as non-profit organizations.
Candidates must also work full-time for a minimum of 30 hours per semaine. Part-time work requires you to hold more than one job. This will allow you to work a minimum of 30 hours per week.
Loans are subject to certain conditions. This opportunity is only available for Direct loans. You should also check out other programs if you have FFEL and Perkins loans. Consolidating student loans can make your loans eligible. Only the consolidation payments will be counted. All previous payments towards 120 goals are ignored once the consolidation is complete.
What Payments Qualify?
This ITT Tech Student Loan Forgiveness Program requires 120 equal qualifying payments. This means that each payment must be made in full, on time, and under Income-based repay plans. You don’t have to repay the debt while you are still in school or six months have passed since your graduation.
You should also note that you cannot qualify for the forgiveness program if your payments are higher than required. You will receive three credit points for 120 credit goals if you make three monthly payments. Payment for the three remaining months is not required. Also, a minimum ten-year payment period is required. One cannot reduce it.
You must fill out the PSLF form every time you make progress towards the 120 payment requirement. This is how the authorities check whether your payments are eligible for the program. The applicant is also informed about potential problems and helps to solve them. Bad news can come in the form of applicants assuming they have completed 120 payments.
Other Forgiveness Options
The federal government offers many other debt relief programs, including the Public Service Loan Forgiveness program. Other programs such as Perkins Loan Forgiveness or Teacher Loan Forgiveness are also available.
Forgiveness of Teacher Loans
Teacher Loan Forgiveness will grant either $5,000 or $17.500 debt cancellation, depending on where the teacher is located. The program requires five years of full-time service in low-income schools. It should be consecutive.
The applicant receives the benefit after the service period. The basic requirements of this program include a bachelor’s degree and full certification as teacher.
Perkins Loan Cancellation
Perkins Loan Cancellation can also help you get rid of your debt up to 100 percent. This program is available to teachers who work full-time in schools with low income. The program covers Perkins loans only, as the name implies.
The applicant is granted a 15% discharge in the first and second year of the service. The loan discharge percentage rises to 20% in the next two years. In the fifth year, 30% is forgiven. This ITT Tech Student Loan Forgiveness is available to teachers, firefighters, lawyers, public defenders, and military personnel.
Income-Driven Repayment Plans
Moving to an income-driven repayment plan is a good option if you have an ITT tech student loan. Income-driven repayment plans use income as the base. The monthly repayment amount is lower than other programs, and the program offers a more affordable option. The remaining amount is also forgiven after the repayment period. There are also income-driven repayments that can be made in different ways, including:
- Revised Pay As You Earn
- Pay what you earn
- Repayments based on income
- Income-contingent Repayment
Every repayment plan comes with a different rate and payback period. You can repay the debt within 20 to 25 years. The rates vary depending on the program you choose. They can be between 10% and 20% of your discretionary income.
What about private loans?
Borrowers with personal loans don’t have many options for ITT Tech Student Loan Forgiveness. These programs are only available for federal loans. Private lenders don’t usually offer forgiveness options.
You can reach out to the lender directly if you are having difficulty repaying private debt. While some lenders may grant temporary forbearance or lower interest, there is no guarantee.
Debt settlement is an option but should not be the last resort. Debt settlement is a way for borrowers to stop paying their debts and put money away in a savings account. More money will be collected as time goes by.
The borrowers then work with debt settlement companies to convince lenders to accept the lump-sum amount that is typically lower than the original owed balance. This is not a guarantee that the lender will agree to it. Stopping debt payments can have negative consequences for borrowers.
Ask for expert assistance
Borrowers can take advantage of some options to get rid of student loans because of the controversy surrounding ITT Tech’s closing. Others who are unable to use closure as a reason for federal aid may still be eligible for other programs such as Income-driven repayment plans and Teacher Loan Forgiveness.
Expert help is available if you have any questions about the options or how to proceed. We have gathered debt experts with many years of experience in Student Loan Forgiveness applications.
Our experts will analyze your finances and recommend the best ITT Tech student loan forgiveness option. We will help you through each step to ensure that you have a debt-free future. Contact us today to receive a complimentary consultation and take the first step in getting rid of ITT Tech loans.