As of August 2022, a total of 208,000 former students who attended ITT Technical Institute (or ITT Tech) will now see full discharge of their student loan debt after the U.S. Department of Education reviewed the extent of the misconduct leading up to the school’s closure. This is the latest in a series of student loan discharges related to ITT Tech.

ITT Educational Services — the parent company to ITT Tech — filed for bankruptcy in 2016. Here’s what former students need to know about the lawsuits surrounding the school and what the latest student loan forgiveness measures are.

Department of Education grants $3.9 billion in closed school discharges to ITT Tech students

On August 16, 2022, the U.S. Department of Education announced the full discharge of $3.9 billion in student loan debt for approximately 208,000 former students of ITT Technical Institute. This announcement comes after years of turmoil regarding the loans of former students of this shuttered school, which used an array of illegal practices to mislead students about the education they were receiving.

“It is time for student borrowers to stop shouldering the burden from ITT’s years of lies and false promises,” said U.S. Secretary of Education Miguel Cardona in the press release. “The evidence shows that for years, ITT’s leaders intentionally misled students about the quality of their programs to profit off federal student loan programs, with no regard for the hardship this would cause. The Biden-Harris Administration will continue to stand up for borrowers who’ve been cheated by their colleges while working to strengthen oversight and enforcement to protect today’s students from similar deception and abuse.”

As a side note, it’s worth mentioning that the U.S. Department of Education is also erasing student loan debt for some DeVry University and Kaplan Career Institute students.

This news is partly made possible due to borrower defense to repayment, a federal law that allows student loan 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 students could earn with a degree from ITT Tech.

However, some former students of ITT Tech are receiving forgiveness based on something called closed school loan discharge. Per the name, this protection offers forgiveness for student loans when a school closes while a student is attending or soon after they withdrew, provided they did not complete their degree program.

Who will get their ITT Tech loans forgiven?

More than 200,000 former ITT Tech students have now been included in the Department of Education’s recent loan discharges. All students who attended the school from January 2005 until its closure in 2016 can qualify. However, this forgiveness only applies to federal student loans, not private student loans.

The U.S. Department of Education notes that former students will not have to apply for borrower defense to repayment or closed school loan discharge for their loans to be forgiven.

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 are still responsible for paying these 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 Tech for $60 million and an injunction that prohibited ITT Tech from offering student loans ever again.

In September 2020, the CFPB reached another settlement, requiring ITT Tech to forgive $330 million in outstanding student loan balances.

As we mentioned already, this newest announcement from the U.S. Department of Education shows that the total number of students receiving forgiveness has reached 208,000, and that the total amount forgiven should reach $3.9 billion.

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. If you believe you qualify but haven’t seen your loans forgiven yet, consider contacting the U.S. Department of Education.