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ITT Students Seek Recognition in Bankruptcy Lawsuit

January 4, 2017
 
 

A group of five former ITT Technical Institute students have filed a lawsuit in the Southern District of Indiana seeking to be named creditors in the defunct for-profit chain's bankruptcy proceedings.

The lawsuit, filed by attorney Eileen Connor of the Project on Predatory Student Lending at Harvard University, alleges that ITT violated consumer protection laws, engaged in deceptive recruiting practices and enrolled unqualified students to generate revenue from federal and private student loans. It asks to have the case declared a class action and also asks the court to block the for-profit from collecting on private student loans taken out to attend its campuses.

ITT closed its 130 campuses in September, nearly two weeks after the U.S. Department of Education prohibited the for-profit from enrolling new students using federal financial aid. The chain had also been investigated and faced lawsuits from state and federal investigators for years before the shutdown. And its accreditor this summer found it was out of compliance with criteria.

The lawsuit seeks damages for students who allege wrongdoing and aims to strengthen their case for federal student loan discharge.

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