Seeking reprieve from fed loan repayment, former ITT students file lawsuit

Dive Brief:

  • Five former students at ITT Technical Institute have filed a lawsuit to be named as creditors of the now-closed for-profit institution.
  • Inside Higher Ed reports that the students, who are ultimately seeking reprieve from federal student loan repayment for courses taken at ITT, are seeking a class-action lawsuit for all students alleging fraudulent marketing and career development against the school.
  • ITT closed more than 130 campuses last fall after federal officials blocked the school from receiving federal student loan disbursements. The closure has caused a rush of lawsuits from students claiming the school did not give notice and filings against the federal government for not upholding promises to forgive loans received through enrolling at the school.

Dive Insight:

What role will deregulation, or the perceived arrival of it under a Trump administration, play in student loans being forgiven by the U.S. Department of Education? Many observers expect for-profit schools to return to the marketplace and to thrive under new rules; so what role, if any, will it play in courts’ interpretation of fraudulent business practice if the government decrees the sector to be legitimate?

For current college leaders looking to prevent their schools from being targeted as fraudulent in marketing or career preparation, internal marketing should dramatically increase to promote career services and financial exit planning. Even though many students do not find career services offices helpful, bolstering and promoting these offices will be an effective tool against any potential legal claims from former students.

Filed Under: Higher Ed Legal / Courts For-Profit