John Baughman was pursuing a career in information technology in the Systems and Cybersecurity program at ITT Technical Institute in Boise, ID. With just six months left to go, Baughman was looking forward to graduating and getting a job.
But on September 6, 2016, after spending more than three years in the program, he was notified that ITT Educational Services was closing all of its ITT Technical Institutes. He and thousands of others across the country will be impacted.
“It’s definitely a precarious situation to be in,” said Baughman. “I was enlisted in the U.S. Navy prior to attending ITT Tech so I was using the GI Bill. So financially I am not as impacted as other students without that opportunity. But I can never get back what I’ve used from the GI Bill so that is a loss.”
Moving forward, Baughman plans to enroll in a program at another school that accepts ITT Tech credits. However, the program is more intensive and may take more time than Baughman originally planned. The added length may also mean that the rest of his educational costs will not be covered.
“I think students need to act quickly,” said Baughman. “They need to find a new school if they want to mitigate the impact of this fiasco.”
ITT Tech shuts its doors for good
After more than 50 years of operation, ITT Tech will permanently shut down. The closure is the result of increased regulation and sanctions from the U.S. Department of Education.
ITT Tech offered students an alternative to the traditional college track. As a for-profit institution, the school provided specializing training in targeted fields. Last year alone, it had over 45,000 students and $850 million in revenue.
However, in recent years, questions arose about the institution’s credibility, recruitment and accounting methods.
In August, the U.S. Department of Education took action, instituting a ban on ITT Tech. It prevented them from enrolling new students who relied on federal aid to pay for their education with them.
ITT Educational Services, Inc. issued a press release on their website that blamed the government for the closure and the impact on students.
“We believe the government’s action was inappropriate and unconstitutional,” the statement said. “However, with the ITT Technical Institutes ceasing operations, it will now likely rest on other parties to understand these reprehensible actions and to take action to prevent this from happening again.”
Overall impact on ITT Tech students
The closure leaves 35,000 students without an educational path forward.
And with many students and graduates paying student loans from a now non-existent school, many are confused and concerned about how their debt will be handled.
Education Secretary John B. King wrote an open letter to ITT Tech students explaining the concerns the Department of Education had about ITT Tech. It also details its plans to help students and recent graduates moving forward.
“Ultimately, we made a difficult choice to pursue additional oversight in order to protect you, other students, and taxpayers from potentially worse educational and financial damage in the future if ITT was allowed to continue operating without increased oversight and assurances to better serve students,” wrote King.
How ITT Tech students can move forward
Current ITT students, recent graduates, and students who withdrew in the past 120 days will be offered two options by the U.S. Department of Education:
- Credits transfer: For those who wish to continue their education, the U.S. Department of Education is connecting them with community colleges who will transfer over ITT Tech credits. However, if students opt for this option, they may not be eligible for a closed school discharge on their student loans.
- Student loan forgiveness: Current or recent students may be eligible to have their federal—not private—student loans discharged as a result of the closure. All federal debt will be forgiven so students have the opportunity to pursue their education or career goals elsewhere. Information on qualifications and how to apply for loan forgiveness will be posted on the Federal Student Aid website when available.
For an ITT Tech alumnus who graduated several years ago, there may be ways to have loans forgiven, too. Many alumni have alleged that ITT Tech recruited them aggressively and misled them about costs and job opportunities.
ITT Tech alumni may be eligible for borrower defense to repayment claims. That’s when federal loans are discharged if the school committed fraud, misrepresented its services or violated applicable laws.
The U.S. Department of Education has also set up a telephone line to answer questions from ITT Tech students. A team is available at 800-4FEDAID, and a series of webinars is planned for the future to help students transition to next steps.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 6.97% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.30% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.47% – 6.30%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.69% – 7.21%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|