INDIANAPOLIS (AP) — quite 1,000 students who were enrolled at now-closed ITT Technical Institute campuses in Indiana are eligible for nearly $10 million in student loan forgiveness, the state’s attorney general announced Tuesday.
Indiana’s share of a $330 million national settlement follows investigations by several attorneys general over student loans offered by the for-profit school. Attorney General Curtis Hill said 1,354 former students in Indiana will get debt relief.
The 47 attorneys general and therefore the Consumer Financial Protection Bureau reached the settlement with PEAKS Trust, which ran a personal loan program for ITT Tech. consistent with the agreement, PEAKS acknowledged coercing students into removing high-interest loans, has agreed to forgive outstanding loans and end operations.
“This settlement ensures that former ITT Technical Institute students are not any longer subjected to the abusive lending practices of PEAKS Trust,” Hill said during a statement. “We hope this result eases the financial stress that numerous former students have undoubtedly endured.”
ITT Tech filed for bankruptcy and closed its campuses in 2016, including in Indianapolis, South Bend , Fort Wayne and Newburgh. the school chain’s parent company, ITT Educational Services Inc., was based in Carmel. Curtis said students don’t need to do anything to receive the relief.
Income-Based Repayment Program
Another great interim option would be an Income-Based Repayment program. The benefit of an IBR is that it’s based strictly on what you earn. It allows for a more affordable monthly payment capped at 10-15% of your discretionary income.
Also, an IBR program offers the long-term benefit of student loan forgiveness after 20-25 years of payments. The period depends on when they took the loan. Currently, under IBR programs, amounts forgiven are also treated as taxable income. It should also be mentioned that President-elect Joe Biden’s student loan plan focuses heavily on Income-based Repayment programs. Hence, it is expected that such repayment plans will be more accessible in 2021.
If you were attending ITT when it shut down on Sept. 6, 2016, or you withdrew from an ITT Technical Institute on or after May 6, 2016, you have another option. You can transfer earned credits to another institution to continue your education in an equivalent program.
Borrowers who are current ITT students, recent graduates, and students who withdrew in the past 120 days can transfer their credits according to the offer by the U.S. Department of Education.
Transfer Your Credits
If you want to continue your program of study, the U.S. Department of Education is connecting you with community colleges that will transfer over ITT Tech credits.
However, if students opt for this option, they may not be eligible for a closed school discharge on their student loans. Instead, you might want to keep the credits from ITT and transfer them to a similar program in another school.
If you do transfer into a related program offered by another school, that school will evaluate your ITT coursework. It will decide whether to give you credit for already completed works. Also what courses you need to take to complete your program of study.
The Education Department is working with ITT officials and representatives from the state and postsecondary education oversight organizations, to process student records from the 136 schools. So that transfer schools could start evaluating students’ remaining qualifications for Federal Student Aid funds.
ITT will take responsibility for any return of federal student aid funds. The Department will work with ITT officials to make sure the loan funds are restored for future eligibility. If you transfer the credits toward a similar program and you completed or are going to finish that program, you will not be eligible to receive a closed school loan discharge.
We encourage you not to pay for companies for student loan forgiveness or consolidation programs that your federal loan servicer provides for free, on behalf of the Education Department. Your loan servicer, the companies that collect your payments, can also support you with these goals for free of charge. If you need help with your student loans, you should contact your servicer, because you never need to pay for these services.