ITT Tech Loan Forgiveness: 5 Things to Know

There is no question that there is a student debt crisis in America. With over $1.6 trillion in federal loans that have been given out to hardly legal adults, many college graduates’ only certainty for the future is that they will be paying off their education for a long time. Tuition prices have rapidly increased, far surpassing the rate of inflation. 

This has led to many more adolescents relying on federal student loans to get a degree. This, combined with a higher demand for higher education degrees in corporate America has raised tuition costs greatly. Fortunately, there are some relief programs beginning that allow students and graduates to gain some footing on their financial situation. For instance, if you went to ITT Technical Institute, it is likely that you are eligible for ITT Tech student loan debt relief! To learn more, keep reading!

ITT Technical Institute was founded in 1969 and was located in Carmel, Indiana. Over the years, they grew their reach to 130 campuses in 38 states. Their focus was on technical education that practically applied to real-life jobs. ITT Tech was a for-profit school. 

Unfortunately, ITT Tech had some serious financial issues. While costs for functioning skyrocketed, enrollment numbers fell. This led to stress on the financial infrastructure which lead to increased costs that were handed down to the students. This, on top of other accusations, such as falsified paperwork, high default rates on student loans, and low educational standards led to ITT Tech shutting its doors in 2016. The aftermath of ITT Tech’s downfall has been harmful to its alumnus, but there has been a silver lining: Due to the shady practices of ITT Tech’s tuition, a class-action lawsuit led to the cancellation of student debt for those who took out federal loans specifically for the school. 

After thousands of students filed a “borrower defense” claiming that ITT Tech defrauded them, the Department of Education launched an investigation in the school. Unfortunately, it was found that the school did indeed defraud students. This was done through shady recruitment and loan practices. In short, they lied to students to convince them to attend their schools. Ultimately, ITT Tech’s programs were not accredited. This means they were not held in high esteem by the employers these students would soon be applying to. 

Because of this, it was ordered that all federal student loans were to be forgiven for those students who attended ITT Tech — regardless of whether or not they were manipulated into applying. 

Fortunately, there isn’t much that you need to do to receive this debt relief. If you were a student at ITT Technical Institute between January 2005 and when it closed in September 2016, you are eligible to receive loan forgiveness. 

You also need to meet at least one of these qualifications:

However, this does strictly apply to federal student loans. So, if you elected to use private loans instead of federal loans, it is less likely for you to automatically receive student loan forgiveness. 

One of the challenges that we see people face is that even IF the ITT tech student debt is eliminated that you still have other debt that you are struggling to afford to pay, especially with the rise of inflation and increased interest rates. 

Now, if you are struggling with debt and wondering what to do next, we built a free, unbiased debt options comparison calculator (not even an email address is required) that provides a wide range of debt options that may be able to fit your budget. Please note that the calculator is based on your zip code, so it's EXTREMELY personalized

Unfortunately, the order to cancel student loan debt for ITT Tech students does not extend to private loans. While private loans only make up around 7.8% of the total student loan amount, that is still over 80 billion dollars — a staggering amount. Despite this, the government only decided to cancel federal student loans, not private. 

This does not necessarily mean that your loans cannot be forgiven. This does mean that you will need to contact your private lender to find out what your options are. There is a chance that you will need to file your own “borrower’s defense” with the court to secure a forgiveness with the private lender. However, since the lender was similarly defrauded, there is a chance that nothing will come of it. 

So, if you did not fully pay for your tuition with federal student loans, and you supplemented with private loans, it is likely that you will not have all of your student debt canceled. While this can be difficult to hear, you do still have ways that you can help reduce the impact that student debt is having on your life. 

While student loan debt can be crippling, there are steps you can take to ease the burden they have. Here are just a few things you can do to help decrease your total student debt amount.

Though this is best done right out of college, regardless of where you are at, it's never too late to begin budgeting. Make it a goal to create a budget that covers your required living expenses as well as puts some money into savings. Once these things are covered, consider putting a significant amount of the leftover towards your debt. Doing so early can stop thousands of dollars of interest from being piled on your loan. 

Both of these options allow you to stop making payments. Most of the time, there is a deferment period of 6 months after graduation. If you experience any form of hardship, you can request a deferment or forbearance. Keep in mind, however, that you might continue incurring interest when you do this.

While not necessarily widely available, there are some other forms of forgiveness that you may be eligible for.

While this should be reserved for extreme cases of debt, filing for bankruptcy may free you from overwhelming student debt. Student debt is considered unsecured debt. This means, if you file for bankruptcy, it is likely to be fully discharged. You do have to meet certain requirements to be able to file for Chapter 7 bankruptcy. Filing for Chapter 13 bankruptcy would just put you on a payment plan. 

Student loan debt can be crippling, and it’s a terrible way to start your adult journey. If you need help figuring out how to get out of debt, give our team at Ascend a call. We would love to help you figure out your next steps.