On September 6, 2016, ITT announced that it was closing its campus doors, leaving tens of thousands of students across the country in the lurch. ITT students everywhere are figuring out what to do next.
Although students will have a lot of individual considerations, there are two basic options for students who were unable to complete their program at ITT due to its closure:
– First, students who want to wipe out their federal student loan debt and either make a fresh start at a new school or focus on a job may be eligible to have their federal student loans taken out to attend ITT cancelled. They can do this through the “closed school discharge” program:
- A closed school discharge wipes away any federal student loan debt taken out to attend ITT. This discharge relieves students of what might otherwise be very expensive financial obligations for an education at ITT they were unable to complete.
- The downside is that students cannot get back the time they put into their education at ITT, and starting over may not be practical for all students.
- More details about eligibility, relief, and how to apply for closed school discharges is below.
– Alternately, students who want to keep going and complete their program at a different school may be eligible to transfer credits to another school. Whether a school will accept ITT credits—and which credits and how many—depends on the school. Additionally, there’s no guarantee that all or even some ITT credits will transfer to a good school that would be worthwhile to get a degree from (and that isn’t also at risk of closing!), or would in fact reduce the cost or time to complete the degree at a new school.
- The benefit of this option is that the student can keep momentum towards a degree and keep closer to his or her planned education timeline. This may be especially valuable to students who were only a few credits away from graduating.
- The downside is that the student will be ineligible for a closed school discharge of their ITT loans.
- Additionally, transferring credits may not actually save time or money. For students considering this option, it is important to be sure that the transfer of credits will actually save money, time, or both in the individual student’s situation, and that the total investment of time and money in completing the education program will pay off. Students looking at their transfer options may want to start with their local community colleges and state schools. The Department of Education also has a College Scorecard website that students can use to find schools offering comparable programs. Students can then inquire with those schools about credit transfers, costs, and timeline to complete a degree.
Students trying to decide between these two options should try to get two pieces of information early on. First, they should find out exactly how much federal student loan debt they have from their time at ITT, and get a sense of what their monthly payments on that amount would be. Students should contact their servicer for information about their total student loan balances (more tips on accessing federal student loan information are here). Second, they should get a copy of their ITT transcript, which they may need to show schools to find out which credits will transfer. The Department of Education has information about how to request ITT transcripts here at number 6. These records will help students assess their options.
Summary of the Closed School Discharge Option for ITT Students:
- Eligibility: Students who were enrolled at ITT when it closed on September 6, 2016 (including those on an approved leave of absence), or who withdrew any time after May 6, 2016 (or earlier in extenuating circumstances), and who did not complete their ITT program due to the school’s closure, may apply for a closed school discharge. Such students are eligible for a closed school discharge unless they are completing or have completed a comparable educational program at another school by transferring ITT credits or hours to the school or through a teach-out agreement between ITT and the school or other similar means.
- Relief: An approved closed school discharge will cancel the borrower’s federal student loans taken out to attend ITT, including any Direct Loans, Federal Family Education Loan (FFEL) Program loans, or Federal Perkins Loans. This means the student will no longer owe these debts. Additionally, any payments the student has already made on the debts should be refunded and any negative credit history associated with the loans should be removed.
- How to apply: Students must complete an application and send it to their student loan servicer. A copy of the application and more information about how to apply is available here.
The closed school discharge only applies to federal student loans. Students who also have private student loans (see here for tips on how to tell if your loans are federal or private), or who paid tuition or fees out of pocket, may also be able to get relief on those expenses through a state tuition recovery fund. But this varies from state to state, so students will have to check if their state has a relief program and whether they are eligible (more information available here). The terms of the private student loan contract may also allow for relief in the event of a school closure.