ITT Technical Institute Archives - Page 2 of 2

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SEC Settles Fraud Charges against ITT Technical Institute

Posted on July 6, 2017by Admin

The fraud case has been settled against ITT Technical Institute, but the Securities Exchange Commission continues to pursue top executives from the college for deceiving investors about the high rates of late payments and the number of defaults on student loans backed by the company.

ITT executives assured investors in conference calls that the programs were performing well when in fact the company was making secret payments on the delinquent accounts to delay defaults, according to the complaint.

ITT Technical Institute ended its operations in September, shutting down 137 campuses after the U.S. Department of Education cut off access to federal loans and grants and threatened to pull the school’s accreditation amid mounting lawsuits and investigations. The company filed for bankruptcy protection, leaving 35,000 students with worthless degrees and many with high interest student loan debt.

The student loan programs are what is at the heart of the SEC lawsuit. ITT created two in-house student loan programs. To get investors to finance the programs, the company offered a guarantee to limit the risk of students not repaying the debt. According to the complaint, if a certain percentage of loans defaulted, the company agreed to cover the principal, interest and fees.

The SEC said investors did not have accurate information about the performance of the debt because ITT kept the loan programs off its balance sheets. Regulators said executives failed to tell investors that the company was facing $30 million in guarantee obligation payments at the end of 2012 and used accounting tricks to cover up the numbers.

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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.

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Trump Administration Delays Student Loan Forgiveness Program

Posted on June 26, 2017by Admin

The federal student loan forgiveness program established to refund borrowers who were defrauded by their schools has been put on hold until further notice, according to the Department of Education. This applies to Corinthian College students who were defrauded by the school’s deceptive advertising and false job placement rates. Approximately 15,000 student loan forgiveness claims from Corinthian students had been approved as of October 2016.

Here are the requirements for qualifying for a borrower defense federal loan discharge:

If your school misled you in any way about your loans or education program;
If your school violated certain state laws, such as consumer protection statutes or laws related to your loan or educational services.

Secretary of Education Betsy DeVos said on June 14 that last year’s expansion of the forgiveness rules “missed an opportunity to get it right.” Several Democratic senators are demanding answers and asking the Dept. of Education to provide detailed information regarding loan forgiveness applications and approvals for past students of Corinthian Colleges, along with two other failed for-profit college chains: ITT Technical Institute and American Career Institute.

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Former ITT Tech Students Promised Help, then Silence

Posted on June 12, 2017by Admin

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.

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For-Profit College Debt Strikers Plead with Obama to Discharge their Loans before Trump’s Inauguration

Posted on December 5, 2016by Admin

More than 1,000 students (calling themselves the Debt Collective) from for-profit schools are protesting, claiming their colleges used manipulative financial tactics while providing them with a subpar education.

They released a statement and video on Monday, pleading with President Obama to discharge their student loans before President-elect Trump’s inauguration. The Debt Collective claims that the Obama Administration has yet to provide the relief it promised. One former Corinthian student said she had $32,000 of student loan debt and was unemployed, despite having applied to about 300 jobs in the criminal justice field. She said she had either received no response or had been told she did not qualify.

The Department of Education refunds federal loans to students enrolled in the last 120 days before a college closes in what is called a closed school discharge. ITT Tech closed its doors in September. But students who left the school before that 120-day time frame or who graduated but still feel they were defrauded by their college must instead file a “borrower’s defense to repayment” claim.

The Obama Administration had planned to resolve back-logged relief claims from Corinthian and ITT Tech students by the spring of 2017, but will likely now be under additional pressure to speed resolution of the claims.

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The collapse of ITT Tech gives former students a chance to wipe out their student loan debt

Posted on September 1, 2016by Admin

Students who graduated or dropped out of ITT Technical Institute may be the biggest winners in the federal government’s aggressive actions against the for-profit school. The Education Department’s sanctions on the Carmel-based ITT Educational Services Inc. allow past students to take advantage of the “defense to repayment” rule that can wipe out their student loans.

Federal law gives the Education Department broad discretion to forgive student loans for borrowers who claim they were defrauded or that their college violated state laws. The government recently made the case that ITT has done just that and is inviting former students to request what could amount to hundreds of millions of dollars in loan forgiveness.

The “defense to repayment” rule applies to all former students with federal loans, but does not cover private loans.

Another piece of good news- The Education Department is simplifying the claim process for borrowers. The defense to repayment rule falls under the U.S. Higher Education Act. It has existed for years, but received little attention until recently.

The Education Department has already forgiven more than $4.2 million in loans from more than 2,000 Corinthian College students who claim they were defrauded by the for-profit chain. Students at other for-profit colleges, such as Brown Mackie College, which is closing most of its campuses, will likely have a strong case as well due to the precedent set by Corinthian.

ITT has been ordered to begin working with other colleges to facilitate transfers for students. Anyone already enrolled in ITT can continue to access federal loans if they want to finish their program. If ITT closes, the Education Department has said it will forgive current students’ loans.

Here are some ways you can submit a claim:

Go online: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/borrower-defense

Email your claim: FSAOperations@ed.gov

Mail your claim: U.S. Department of Education, PO Box 194407, San Francisco, CA 94119