Posts Tagged: ‘ITT bankruptcy’

Former ITT Tech Students Promised Help, then Silence

June 12, 2017 Posted by kingcade

It’s been nearly five months since former ITT Technical Institute students received a glimmer of hope that their student loan debt would be forgiven.  Today they are still waiting.

The U.S. Department of Education announced on Jan. 13 that former ITT students — people who graduated or dropped out of the for-profit now defunct college chain long before the Obama administration forced it into bankruptcy — had a chance to get their federal student loans forgiven through a process called borrower defense to repayment.

In a statement, the Education Department said “approvals are beginning” for those students who claimed ITT defrauded them.

That work appears to have stopped altogether. Although the government issued letters to some students promising loan forgiveness within the 120 days, there is no evidence that the Education Department has forgiven loans for any former ITT students since President Trump’s Jan. 20 inauguration.

This is just the latest setback for former ITT Tech students who say they were lured in with false promises and left with a mountain of debt (five- and six-figure student loan debt), few marketable skills and limited job prospects.

Several Democratic senators are seeking answers. U.S. Sens. Dick Durbin of Illinois, Chuck Schumer of New York, Patty Murray of Washington, Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts last week sent a letter to DeVos requesting information on borrower defense claims.

The senators are asking the Dept. of Education to provide detailed information regarding loan forgiveness applications and approvals for past students of ITT, along with two other failed for-profit college chains: Corinthian Colleges and American Career Institute.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Student Victims Seek to Become Creditors in ITT’s Bankruptcy

January 9, 2017 Posted by kingcade

Five former ITT students have taken matters into their own hands by petitioning a federal bankruptcy court to consider student loan forgiveness as part of the school’s liquidation.  The now defunct Corinthian Colleges or ITT Educational Services left students with worthless degrees and mountains of student loan debt.  Because tax payers backed most of these loans, the Department of Education has been reluctant to forgive them.

For years federal regulators allowed ITT schools to keep operating, even though they were well aware of the company’s questionable practices. For example, ITT had been under investigation by the Education Department since 2014, and state regulators had accused it of misleading students about the quality of its programs and their job potential upon graduation.

The Consumer Financial Protection Bureau filed a lawsuit against ITT nearly three years ago, accusing the chain of predatory student lending. But even with all of this evidence it hasn’t helped former students of the college discharge their student loan debt.

ITT filed for bankruptcy last year after the Education Department cut off the school’s access to federal student aid. At the time, the company operated 137 campuses in 39 states.  The company was successful for years, thanks to the revenues from federal student aid. Over the past 10 years, ITT students took on over $7 billion in debt; roughly $1 billion were private loans.

In a first of its kind approach, student loan borrowers will be at the table, not just banks and regulatory agencies fighting over ITT’s assets.  They in fact contributed to the creation of assets at ITT. The five former ITT students involved in the suit are seeking to establish themselves and other former ITT students as creditors in the company’s bankruptcy. Typically a company’s creditors are people or entities to whom it owes money.

ITT reported assets of $389 million and liabilities of $1.1 billion to the bankruptcy court. The company had also deposited $94 million in escrowed funds with the Education Department before it collapsed. That money could go toward some loan forgiveness.

The company’s assets include almost $80 million owed by ITT students who were enrolled at the time of the bankruptcy filing or who had withdrawn funds within the previous 90 days.  Some of the $80 million is likely from students who never even had the opportunity to attend a class because of the school’s collapse.

The lawyers fighting on behalf of the students hope the judge will make a legal finding that ITT violated state consumer protection laws. This would make it easier for the students to get their loans canceled by the Department of Education.  The lawyers in the case are also requesting that the five students’ claims be asserted on behalf of all former ITT students.

Click here to read more on this story.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.