ITT Tech student loan forgiveness lawsuits: What former students need to know

The Washington Post/Getty Images

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here’s an explanation for

Many former students who attended ITT Technical Institute (or ITT Tech) will now see full forgiveness of their student loan debt after the Department of Education approved 18,000 borrower defense to repayment claims.

ITT Educational Services — the parent company to ITT Tech — filed for bankruptcy in 2016. Here’s what former students need to know when they can anticipate forgiveness.

Department of Education grants full student loan forgiveness to ITT Tech students

On June 16, the Department of Education announced the acceptance of 18,000 borrower defense to repayment claims for students who attended ITT Tech, resulting in $500 million in forgiveness.

Borrower defense to repayment is a federal law that allows student borrowers to seek loan forgiveness if a college or university misled them, or engaged in other misconduct in violation of certain state laws. The department concluded that the school misled students about the likelihood of employment after graduation and the potential salaries that students could earn with a degree from ITT Tech.

“Our action today will give thousands of borrowers a fresh start and the relief they deserve after ITT repeatedly lied to them,” Education Secretary Miguel Cardona said in a statement.

Students granted relief will receive a notice about the forgiveness from the Department of Education in the coming weeks.

Who will get their ITT loans forgiven?

As of now, the Biden administration is forgiving student loan debt for 18,000 borrowers.

“Many of these borrowers have waited a long time for relief, and we need to work swiftly to render decisions for those whose claims are still pending,” stated Cardona.

If you don’t get approved initially or after the final decisions are made on the pending claims, you still may be eligible to get a refund on these student loans. Under a lawsuit that was settled last year with the Consumer Financial Protection Bureau (CFPB), 35,000 former ITT Tech students are ensured student loan relief.

To see if you’re eligible to get your loans discharged or get a refund, you must first meet some qualifications.

For federal student loans, you’re eligible to receive a closed loan discharge if:

  • You attended an ITT Tech school that closed (or it closed soon after you withdrew).
  • You did not complete your program of study.

This lets you discharge up to 100 percent of your federal student loans.

If you withdrew from ITT before May 6, 2016, you’re completing a program at another institution or you completed all the coursework for your program (even though you haven’t received a diploma), you’re not eligible to get your loans discharged.

Private student loan borrowers have similar requirements for loan forgiveness, but there’s a high likelihood that a lender will reach out to you about your eligibility and you won’t have to do anything on your own. However, if you haven’t heard from anyone, you may need to contact your loan servicer to review your options. You can also contact the CFPB to see how to get relief.

ITT Tech lawsuit overview

A lawsuit was filed after ITT Tech entered bankruptcy and closed its schools in 2016. Even after the school’s closure, hundreds of thousands of students were still on the hook to pay for their outstanding student loans. A 2018 lawsuit settlement forgave $600 million that 750,000 students owed to the school.

That lawsuit affected students who attended ITT Tech from 2006 to 2016, as well as other students who made payments after the company declared bankruptcy. Under the settlement, federal student loans were discharged, thanks to borrower defense to repayment.

Still, private student loans don’t offer this protection, and thousands of students were still responsible for paying these loans. For instance, Navient still required payments even after the government discharged the federal student loans.

In June 2019, the CFPB reached a settlement with ITT Tech that discharged about $168 million in private student loans. In August 2019, the CFPB reached an additional settlement, including a judgment against ITT for $60 million and an injunction that prohibited ITT from offering student loans ever again.

In September 2020, the CFPB reached another settlement, requiring ITT to forgive $330 million in outstanding student loan balances. In total, ITT Tech has erased more than $500 million in private student loan debt.

Next steps

If you attended ITT Tech and have outstanding student loans, you may qualify for cancellation, discharge or a refund, depending on your loans and program status. For most borrowers, you’ll be notified by PEAKS Trust — ITT Tech’s private student loan program — or your loan servicer if you are eligible for student loan forgiveness. In the majority of cases, you won’t need to do anything.

If you haven’t heard from anyone about your loans, you should contact your loan servicer. Your servicer should be able to walk you through the process and find out if your loans are eligible for relief and how much relief you’re entitled to. Private student loan borrowers who don’t get help from loan servicers may want to reach out to the CFPB or a lawyer.

If you’re loan servicer isn’t responsive, you can complete a borrower defense form or a closed loan discharge to get assistance with your federal student loans. You may also be eligible for a state tuition recovery fund, depending on your school and status. If you’re eligible for forgiveness through borrower defense to repayment and have already submitted an application, you should receive a notice from the department in the next couple weeks.

Learn more:



Written by
Hanneh Gundersen
Student loans reporter
Hanneh Gundersen specializes in everything related to student loans and helping you finance your next educational endeavor. She aims to help others reach their collegiate and financial goals through making student loans easier to understand.
Edited by
Senior mortgage editor