School’s out

30 Jan 2017 By

Obama’s crackdown on for-profit colleges raised standards and shut down bad actors. A $7.3 bln lawsuit filed by ex-students of bankrupt ITT seeks federal debt forgiveness too. It underscores the high price of doling out loans without first ensuring schools can make the grade.

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A group of five former ITT Educational Services students on Jan. 3 filed a $7.3 billion class-action lawsuit against the for-profit college chain, seeking to be recognized as creditors in the college's bankruptcy proceedings. A federal bankruptcy judge was due to hear the motion on Jan. 30.

ITT Educational Services ran 137 campuses under the names ITT Technical Institute and Daniel Webster College.

The Project on Predatory Student Lending at Harvard Law School is representing the students.

ITT shuttered in September 2016, one month after allegations of mismanagement and fraudulent recruiting practices prompted the Department of Education to cut access to new federal student aid.

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