ITT Tech Loan Forgiveness? After Closing, Former Students Of For-Profit College Start Debt Strike

More than 170 former ITT Technical Institute students declared this week that they won't pay back the federal loans they took out to attend the recently closed for-profit college. In a letter addressed to President Barack Obama and Education Secretary John King, the Debt Collective-affiliated group wrote that it was refusing to deal with its debt because the government allowed them to attend a corrupt school.

"We do not owe them. In fact, you owe us and our fellow ITT borrowers," it said on ittstrike.com. "Each of us is still left with tens of thousands of dollars of debt to you, the very agency that was supposed to have protected us from ITT’s scam."

The parent company of ITT Tech, a chain with 40,000 students at about 130 campuses in 38 states, announced Sept. 6 that it was ceasing operations after a series of Education Department sanctions and various state investigations. Current students could either apply to get their loans discharged or transfer their credits. But former students had fewer options.

Former ITT Tech students who feel they were defrauded can ask the Education Department to erase their debt and reimburse previous payments through a borrower defense to repayment discharge, a technicality that stripped about 4,000 former Corinthian Colleges students of $73.1 million in debt earlier this year. In order to get a borrower defense to repayment discharge, a student has to submit a claim that essentially proves the school "committed fraud by doing something or failing to do something, misrepresented its services, or otherwise violated applicable state law related to your loans or the educational services you paid for," according to the department's website.

There is a subset of students, however, who protest paying because the overall system — which, in part, allows for-profit colleges to derive 90 percent of their revenue from financial aid — is broken. So far, 135 people have signed onto the ITT strike, claiming they were misled about their job prospects and how much attending ITT Tech schools would cost. Corinthian's debt strike has about 200 members.

"We’re not irresponsible brats whining about our loans," ITT alumnus and striker Joseph White told the Washington Post. "ITT lied to us. It’s fraud."