Education Law

'Debt strike' launched by ITT Tech alums after schools shut down

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Following the recent closure of the for-profit ITT Educational Services, a group of 100 people who attended ITT Technical Institutes announced that they will not be repaying their loans, because they claim to have been defrauded.

The “debt strike” is calculated to pressure the government into cancelling their debt, the Washington Post reports.

“If you found a school was defrauding its students, why would you protect that school and not the students? That’s backwards logic,” Alyse Zachary, who submitted a loan-forgiveness claim to the Department of Education, told the newspaper.

When ITT announced on Sept 6 that it was closing the schools, John B. King Jr., the U.S. Secretary of Education, wrote a blog post explaining that if recent ITT students had federal loans for the program, they may be eligible for loan discharge, or able to transfer their credits to another school. If they chose the latter, he wrote, it could limit their ability to have federal loans discharged.

“We’re not irresponsible brats whining about our loans. ITT lied to us. It’s fraud,” said Joseph White, a 2008 ITT graduate. The 39-year-old veteran has more than $80,000 in student loans, and he told the paper that he hasn’t heard anything about the loan-forgiveness claim he submitted to the department last year.

Last year students at Corinthian College, another for-profit school that closed while facing many fraud accusations, organized something similar to the ITT debt strike. The DOE granted them debt relief after it was discovered that the school lied about how many graduates found jobs. There hasn’t been an indication that the DOE will make a similar decision for ITT graduates, according to the Post, and agency officials did not immediately respond to requests for comment.

A publically traded company, ITT closed its campuses in September, following problems with a variety of federal agencies. The school is also under investigation by more than a dozen state attorneys general, and facing lawsuits from the Securities and Exchange Commission and the Consumer Financial Protection Bureau.

“The students weren’t the ones in the wrong. The school was. They took advantage, lied about job placements and stole money from the taxpayers,” Zachary told the Post. Zachary left ITT after deciding that “something was off” with her computer networking classes. She reportedly has $19,000 in federal school loans, and $15,000 in private loans ITT sponsored.

Related article: “Some students may be eligible for loan discharge after ITT closes 130 campuses”

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