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Bankruptcy court settlement could bring relief to some ITT students
Thousands of students nationwide who attended the now-defunct ITT Technical Institute would have nearly $600 million in loans canceled under a proposed court settlement, a significant win for consumers in Massachusetts and elsewhere who have long claimed that the for-profit chain defrauded them out of money and an education.
The settlement, which must be approved later this month by an Indiana federal bankruptcy court judge, also acknowledges that students who attended the college between 2006 and 2016 have a $1.5 billion claim against ITT. That means if any money is left over from the school’s assets after its bankruptcy, students could receive a share. Students who continued to pay their loans to ITT, even after the bankruptcy, will also get almost all of their $3 million back.
The settlement is “a victory for former students who were defrauded by ITT,” according to a letter sent to former ITT students by Harvard University’s Project on Predatory Student Lending, which represented consumers in the bankruptcy case. “However, we know that the student class still faces billions of dollars of federal and private student loans from ITT, and we will continue fight for all ITT-related debt to be canceled.”
Officials with the predatory lending project declined to comment since the judge has yet to sign off on the terms of the agreement.
The trustee in the ITT bankruptcy also declined to comment. However, in documents filed in federal court on Wednesday, trustee Deborah Caruso described the settlement as, “fair, equitable . . . and well within the range of reasonableness.”
Since ITT abruptly shut down its nearly 140 campuses nationwide and declared bankruptcy in the fall of 2016, students have been seeking financial relief. In Massachusetts, more than 560 students, many of them low-income or veterans, attended ITT campuses in Norwood and Wilmington when the school closed. Across the country, ITT had an estimated 35,000 students enrolled in classes.
Last January, a group of students led by the Harvard project, filed a lawsuit claiming that they had a right to ITT’s remaining assets, like any other creditor of the bankrupt institution. They claimed that ITT employed aggressive tactics to recruit them and then deceived or misled them on multiple fronts, including about the cost of attendance, the school’s accreditation status, the experience of instructors, and the likelihood of job placement and salaries they would earn after graduation.
On social media, where former ITT students have shared their challenges and struggles with student loans, news of the settlement was greeted with relief. “This is an amazing start,” said one student on a Facebook page. “Progress,” another student wrote.
But many also acknowledged the settlement is still limited.
The nearly $600 million in debt cancellation only affects loans made directly to students by ITT and still held by the school. Those loans tended to be smaller amounts, usually a few thousand dollars, and were meant to close any gaps in funding, between what students could pay out of pocket for tuition and fees and what was covered by their much larger federal loans.
ITT also sold millions of dollars in its private loans to an organization formed by seven credit unions, including Workers Credit Union in Fitchburg, that are not part of the settlement.
“It is at least admitting they owe us,” said Alyse Zachary, 33, from Florida who attended ITT from 2008 to 2010.
Zachary said she was already attending ITT classes when the school told her she needed to take out a $14,000 private loan to continue. She still has the debt, and it has affected her credit and prevented her from getting jobs at a bank and for the federal government.
Many students who attended ITT and other for-profit colleges that closed or that state and federal regulators found had committed fraud and misled students are still also waiting for relief from their federal student loans.
Consumer advocates and some lawmakers have criticized the US Department of Education under the Trump administration for moving too slowly in providing student loan forgiveness to defrauded borrowers who attended for-profits schools.
A July 2017 government report found that although the Trump administration had received 25,991 claims for loan discharges, it had made decisions on only a handful of them.
US Secretary of Education Betsy DeVos is also considering higher standards for borrowers to qualify for federal student loan relief. Under the draft rules, students would have to prove with “clear and convincing” evidence that the school intentionally deceived them.
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UK: Crisis in teacher recruitment as applications fall by a third
Teacher training applicants have fallen by a third in a year, the latest figures show. Head teachers’ leaders blamed concerns over classroom stress and accountability, and confusion about routes into the profession, for the drop.
By mid-December 12,820 people had applied for postgraduate routes into teaching starting this autumn. This compares with 19,330 people at the same stage in 2016 and 20,330 in 2015. The decrease of 6,510 between 2017 and 2016 equates to 33 per cent.
The government has missed its teacher-recruitment targets for the past five years despite spending hundreds of millions of pounds on training new teachers. Geoff Barton, general secretary of the Association of School and College Leaders, described the figures as disastrous
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Australia: Students’ skills ‘no issue’ for employers
Universities and academics have hit back at claims some graduates are being poorly prepared for work, accusing Education Minister Simon Birmingham of using student attrition rates as “political fodder” and questioning how recent $2.2 billion funding cuts will improve the sector.
Senator Birmingham said yesterday that new figures on completion rates and degree suitability in the workforce showed an increase in non-completions and a fall in employer and graduate satisfaction levels, “so we need to nip that in the bud”.
An annual government-funded employer satisfaction survey found that more than 10 per cent of graduates surveyed said their qualification was “not at all” important and another 15 per cent “not that” important for their job soon after beginning.
Innes Willox, head of employer organisation Australian Industry Group, said the survey showed that some new entrants to the labour market were “verging on the unemployable” because their tertiary credentials were not relevant to the field they were in.
Universities Australia chief Catriona Jackson saidg employer satisfaction had risen in all categories of graduate skills since last year’s survey, including employability, teamwork, adaptability and general communication skills.
“This survey gives us important, transparent information to guide our understanding of the complex transition from study to work,” Ms Jackson said.
She said the research found that more than four in five employers were satisfied with university graduates who worked for them, and 88 per cent of graduates felt their qualification prepared them well for their current job.
She stepped up criticism of $2.2bn in funding cuts recently pushed through in the form of a two-year freeze in federal grants funding.
Senator Birmingham yesterday defended the cuts, saying they were designed to “actually see outcomes from unis that are a value to not only taxpayers but importantly to the students themselves and, of course, to our overall economy”.
National Tertiary Education Union president Jeannie Rea accused Senator Birmingham of creating “political fodder” out of university outcomes.
She said the question of whether students found their degrees relevant immediately upon entering the workforce needed to take into account “ongoing qualification needs” in many industries.
“The more interesting thing is to look five years out, so that someone might start in a job with an undergraduate degree, then in order to progress their career go on to a masters, and so on,” Ms Rea said.
“One of the things that’s also missed is that it’s not all people in their early 20s, but many are mature-aged students who’ve had to change their job; sometimes they’ve been made redundant and had to choose a new field where they start again at the bottom of the pile.”
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