Big Victory for ITT Tech Students in Court

Debtor organizing leads to cancellation of millions in "temporary credits" owed to the school.


A federal judge has approved a settlement confirming that 750,000 former students were cheated by the company and canceling every dollar of student debt held by the for-profit-school. This is a huge victory. It means that 750,000 students who will not have to pay unpaid tuition.

What does this mean for former ITT students?

When ITT charges students for tuition, and their loans and payments don’t cover the full amount, the remaining unpaid portion is considered a “temporary credit.” ITT was hiring debt collectors to hound people to collect the remainder of this tuition. But "temporary credits" have all been canceled. In addition ITT will refund $3 million of past payments.

Make no mistake: Debt Collective members getting organized led to this $600 million victory.

If we can organize even more debtors billion dollar victories will become common, and we won’t stop until all $1.5 trillion dollars of unjust student debt is gone!

What this settlement doesn’t mean

This settlement includes a $1.5 billion dollar claim by former ITT students. Basically this means that ITT students claim they are owed $1.5 billion dollars which covers the federal student loans they were forced to take out to attend ITT. Both ITT and the federal courts have recognized this claim is legitimate. However, ITT doesn’t have $1.5 billion dollars laying around in their bank accounts (usually entities with that amount of money don’t file for bankruptcy). So ITT isn’t going to pony up here.

No one’s federal student loans are getting cancelled as a result of this case. To win that relief, we will need to keep fighting the federal government.

What does this mean for people who filed borrower defense (DTR)?

This settlement does NOT legally force the Department of Education to discharge defense to repayment applications from ITT students. In a separate case in September a federal judge ruled that it was illegal for the Department of Education to ignore the borrower defense rules established in 2016. Even though those rules are now in effect, it is not clear that the Department of Education will actually begin processing these applications under the rule because they are horrible people, especially Betsy DeVos.

This settlement does help put some pressure on the Department of Education. It recognizes that ITT students have a legitimate claim to $1.5 billion in debt relief. This will make it harder and harder for them to pretend that federal student loans are enforceable.

What does this mean for people who have private student loans from their time at ITT?

Private loans are different than the “temporary credits” because they are not owed to ITT itself, and they are not covered by defense to repayment because they are not federal loans. Instead these are loans from third party lenders like Sallie Mae. These debts are also fraudulent but unfortunately they are not affected by this court victory.

What’s next?

There will continue to be legal cases related to ITT and borrower defense to repayment. Like the ITT bankruptcy procedure itself, these cases will take a long time to work their way through the courts and the results are never assured.

In the meantime the Debt Collective is organizing with state attorneys general to file class wide discharges. Step on is to make an account on our platform listing for-profit college debt as a type of debt that you have. Once you have an account, you will be able to access the AG campaign on our community page.

It is important to remember that people used to laugh when we said we wanted to organize a student debt strike to abolish all student debt. They aren’t laughing anymore.There are now members of congress elected on an explicit platform of student debt cancellation. We have come so far. There is still a long ways to go and there will be many victories to celebrate along the way. These victories are sweet and we should celebrate them. Now go tell your friends to dispute their debts and get involved!

For more info on this court victory see the press release that the Project on Predatory Student Lending issued.

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