Students who used federal loans to attend Carmel-based ITT Technical Institute as far back as 2005 will automatically get that debt canceled after authorities found “widespread and pervasive misrepresentations” at the defunct for-profit college chain.
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Almost all the schools involved are for-profit colleges. The list includes ITT Technical Institute, which was headquartered in Carmel and shut down in 2016.
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The rule is expected to put many for-profit college programs in jeopardy. At not-for-profit colleges, it would have no effect beyond certificate programs, which often focus on career training.
This is the fourth finding against Carmel-based ITT Tech that has led to the approval of debt relief claims by the department. All told, the evidence has resulted in about $660 million in discharges for roughly 23,000 students.
The Education Department announced Thursday it will forgive student debt for more than 100,000 borrowers who attended colleges in the now-defunct, Carmel-based ITT Technical Institute chain but left before graduating.
The U.S. Education Department said Wednesday it was erasing student debt for thousands of borrowers who attended the for-profit college chain, which closed in 2016. The chain’s parent, ITT Educational Services Inc., was based in Carmel.
The council gained notoriety for allowing for-profit chains Corinthian Colleges and Carmel-based ITT Technical Institute to remain accredited despite widespread findings of fraud.
The Education Department said many claims were submitted by borrowers who attended ineligible programs or who failed to make a valid claim for loan forgiveness.
More than 1,300 students who were enrolled at now-closed ITT Technical Institute campuses in Indiana are eligible for student loan forgiveness as part of a $330 million national settlement affecting as many as 35,000 former ITT students.
The collapse of for-profit chains Corinthian Colleges and Carmel-based ITT Technical Institutes ushered in a flood of claims that are still being resolved.
Elements Financial, formerly the Eli Lilly Federal Credit Union, is among seven credit unions that collectively agreed to pay $7.5 million to settle a lawsuit brought by ITT Educational Services' bankruptcy trustee.
A Carmel-based church plans to close on its $1.8 million purchase of the building near Interstate 465 and Michigan Road on November 5.
The modest settlements might suggest the SEC concluded its case wasn't that strong or that it would be difficult to explain to a jury.
The deals with former ITT CEO Kevin Modany and Chief Financial Officer Kevin Fitzpatrick were reached days before trial and include more than financial settlements.
A lawsuit filed by ITT Educational Services’ bankruptcy trustee seeks $250 million from the firm’s former CEO and board members, whom she alleges were disengaged as the business melted down.
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.
Former CEO Kevin Modany and former Chief Financial Officer Daniel Fitzpatrick tried to settle the case last year, but SEC commissioners rejected the deal. Another settlement conference is scheduled for May.
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.
More than 7,300 claims of fraud came from students who attended the now-defunct Carmel-based ITT Technical Institute chain.
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.
The Eli Lilly Federal Credit lost a bundle on loans to ITT Technical Institute students a few years ago. Now the credit union, which adopted the Elements Financial moniker two years ago, may get hit with a lawsuit from the bankruptcy trustee for the now-defunct for-profit school operator.
