A federal bankruptcy judge in Indianapolis has given final approval to a $600 million settlement that will affect about 750,000 former students of ITT Technical Institute
Education Secretary Betsy DeVos' move to delay Obama-era regulations to help students defrauded by for-profit colleges was dealt a setback Wednesday.
The Trump administration is granting only partial loan forgiveness to the vast majority of students approved for help because of fraud by for-profit colleges, according to preliminary Education Department data.
Attorneys for the defendants have asked the court to discuss the case, arguing it falls far short of the standards needed to warrant a full-blown trial.
Education Department documents show that students filed nearly 24,000 federal fraud complaints between President Donald Trump's Jan. 20, 2017, inauguration and April 30 this year, almost entirely against for-profit colleges.
The lawsuit alleges that ITT Educational’s bankruptcy and the closure of its 130-school chain could have been avoided or minimized if the board of directors had fulfilled its duties instead of focusing on keeping former CEO Kevin Modany happy.
The SEC broadly charges that two former ITT Educational Services executives concealed from investors the “extraordinary failure” of two off-balance-sheet student loan programs ITT helped set up in 2009 after the financial crisis shut down the market for traditional private education loans.
The Department of Education is considering only partially forgiving federal loans for students defrauded by for-profit colleges, according to department officials, abandoning the Obama administration's policy of erasing that debt.
Tens of thousands of former students who say they were swindled by for-profit college operators like ITT Educational are being left in limbo as the Trump administration delays action on requests for loan forgiveness.
The SEC in a blistering 56-page suit had charged that the pair concealed the company’s rapidly eroding financial condition and “routinely misled” the firm’s outside accounting firm, PwC. It’s not clear what the terms of the settlements were.
The trustee charges that Sam Odle and fellow outside directors should have ousted CEO Kevin Modany—a move that likely would have been well-received by the U.S. Department of Education and ITT’s accrediting agency.
Five former ITT Educational students filed a motion asking that they—and thousands of other students who attended the school between 2006 and 2016—be recognized as creditors as the school’s bankruptcy case moves forward.
Hundreds of boxes of potentially important records are being stored as part of the ITT Educational Services bankruptcy. Among them are legal documents, loan information, Social Security numbers and other personal data.
The Carmel-based, for-profit educator began liquidation proceedings Friday after closing 136 technical schools, leaving over 35,000 students stranded in one of the largest college shutdowns in U.S. history.
ITT Educational Services Inc., the 70-year-old for-profit college operator that shut down its 136 technical schools last week, has hired advisers to liquidate its assets, according to one of the firms brought in to handle the sales.
The Carmel-based for-profit educator, which last week shut down all 136 of its ITT Technical Institute campuses in 38 states, said it will “cease all operations” on Friday.
More than 100 former students of now-closed ITT Technical Institutes announced Wednesday they'll no longer make payments on their federal student loans, part of a revolt against what they call the Obama administration's negligence in policing for-profit colleges.
Six of Indiana’s U.S. representatives filed legislation Tuesday to help veterans regain their GI Bill education benefits after the closure of ITT Technical Institute.
Indiana Gov. Mike Pence wants the U.S. Department of Veterans Affairs to reinstate GI Benefits for students who enrolled in ITT Technical Institute, but that may not be legally possible.