Five former students filed a 109-page complaint. The five former students are attempting to act as representatives for hundreds of thousands who say they have been defrauded by the school.
ITT Technical Institute has filed for bankruptcy last year after the Education Department cut off the company’s access to federal student aid. On January 3rd, 2017, five former students filed a 109-page complaint. The five former students are attempting to act as representatives for hundreds of thousands who say they have been defrauded by the school. The goal of the complaint is to have their student debt canceled from the bankrupt school.
By the time, ITT Tech had declared bankruptcy was already subject to lawsuits from Consumer Financial Protection Bureau, the Securities and Exchange Commission, and the Massachusetts and New Mexico attorneys general. At the time of bankruptcy, ITT Tech had 137 campuses across 39 states. The closure of the schools displaced over 35,000 students and over 8,000 employees.
ITT Tech reported total assets of $389 million and liabilities of $1.1 billion to the bankruptcy court. Of those assets include $80 million owed by ITT Tech students who were enrolled at the time of their bankruptcy filing.
The students are requesting a court order that would certify the case as a class action. They are also seeking court orders for an injection ordering ITT from collecting on all private student loans that were administered by ITT, actual and compensatory damages against ITT Tech in an amount to be determined and an order awarding disbursements, costs, and attorney fees.
“Since the filing of these Chapter 7 cases in September, we have been working with state regulators, the SEC, the Consumer Financial Protection Bureau, and the Department of Education to better understand and address the causes of ITT’s collapse and develop a path forward,” said Deborah J. Caruso, the Chapter 7 trustee appointed by the U.S. Bankruptcy Court to oversee the liquidation, responded to the students’ lawsuit in an email.
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