Information for Villalba et al. v. ITT Class Members
The Latest
On February 23, 2022, the Bankruptcy Court approved a plan for distributing money from the bankruptcy estate to members of the student class, which includes anyone who attended ITT at any time from January 1, 2006, to September 16, 2016, as well as anyone who attended Daniel Webster College at any time from January 1, 2009 to September 16, 2016. Former students should have received notices by mail and email with information on how to confirm/correct mailing information and verify preferred payment methods. For more information, please visit: www.ittstudentclaimsettlement.com
Filing for Borrower Defense?
Dreams Destroyed: How ITT Technical Institute Defrauded a Generation of Students is a publicly available report on ITT’s fraud and wrongdoing. Many of the documents cited as evidence in Dreams Destroyed are subject to a series of Protective Orders in the ITT bankruptcy case. This means that the Court has only allowed the Department of Education and former ITT students, who use these redacted documents in Proceedings before the Department of Education, including for Borrower Defense Applications, to have these documents. By requesting the documents cited as evidence in Dreams Destroyed, you certify that you are a former ITT student, and that you will only use these documents in a submission to the Department of Education.
Questions about the settlement
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A year after ITT students filed a complaint against ITT and a class Proof of Claim in the ITT bankruptcy case, they proposed a settlement between the Trustee and the Student Class. The proposed settlement agreement received final approval on November 28, 2018. The settlement agreement recognizes a $1.5-billion-dollar claim against ITT by students who attended the school between 2006 and 2016, for widespread, systematic fraud and breach of contract. The Students’ claims included ITT’s use of high-pressure sales tactics to get students to enroll and remain enrolled, and that ITT deceived and misled students about financial aid options and costs of attendance, job placement and salary rates, the quality of equipment and experience of instructors, the desirability of ITT graduates by employers, ITT’s accreditation status, the transferability of credits, and career placement assistance.
Some Key Terms of the Agreement:
Student Claimants get an approved $1.5 billion claim in the bankruptcy. In exchange, former ITT students give up their claims against the estate of ITT, and keep their rights to seek further relief from the Department of Education and private lenders (per the settlement agreement this number was ultimately reduced to $1.1 billion because the Department of Education discharged a portion of ITT debt);
Over $500 million in student debt held by ITT is canceled and that cancellation will not be taxable; and
The Trustee returned the $3 million that students paid directly to ITT after it declared bankruptcy (this already happened).
Click here to view the settlement agreement and exhibits.
Click here to view the notice and opt out form.
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You are part of the Settlement Class if you attended ITT any time from January 1, 2006 to September 16, 2016, or if you attended Daniel Webster College from January 1, 2009 to September 16, 2016.
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If you only attended ITT before 2006, you are not part of the Settlement Class.
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No. The trustee can only cancel debts owed directly to ITT. Therefore, the settlement does not cancel federal or private loans. The settlement canceled nearly $600 million in debts that were owed directly to ITT, sometimes called “Temporary Credits.” It also returned $3 million to students who made payments on those debts since ITT declared bankruptcy in September 2016. There will be accurate credit reporting showing that these accounts have been deleted or paid in full.
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ITT issued Temporary Credits to students to pay tuition not covered by federal and private student loans. Many Temporary Credits were later replaced by private loans, including Student CU Connect CUSO and PEAKS loans—these debts are no longer considered Temporary Credits and are not included in the nearly $600 million that is being canceled. Collection of the Temporary Credits, on behalf of ITT, were serviced by UAS, FirstSource, Security Credit Systems, Inc., Premiere Credit NA, General Revenue Corporation and other agencies. If you made payments to any of these collection agencies since September 2016 on ITT-related debt, you are entitled to receive money back, minus any administrative fees.
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As of March 23, 2018, all refund checks were mailed.
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This settlement will only affect your credit if you had Temporary Credits. If you had Temporary Credits, as described above, your account will either be marked as paid in full or will be deleted. There will be no further credit reporting on these accounts.
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On February 23, 2022, the Bankruptcy Court approved a motion for distribution to the student class. You can read the motion here. For more information about the distribution, please visit: www.ittstudentclaimsettlement.com.
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The Court has approved lawyers (called “Class Counsel”), the Project on Predatory Student Lending and Jenner & Block LLP, to collectively represent all Settlement Class Members. You will not be asked to pay for the services of these attorneys. You may hire your own lawyer to advise you personally about your rights, options or obligations as a Settlement Class Member in this lawsuit.
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If you do nothing and you attended ITT between January 1, 2006 and September 16, 2016, or Daniel Webster College between January 1, 2009 and September 16, 2016, you are a part of the Settlement Class, and you release all claims you may have against the Debtors related to the allegations in the case. You do not release claims against third parties, including the Department of Education and private loan lenders.
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The settlement became final on March 5, 2019.