ITT students may get loan forgiveness after school shuts down - wave3.com-Louisville News, Weather & Sports

ITT students may get loan forgiveness after school shuts down

ITT Technical Institutes is blaming federal government sanctions for the closures. (Photo source: WAVE 3 News Archives) ITT Technical Institutes is blaming federal government sanctions for the closures. (Photo source: WAVE 3 News Archives)

LOUISVILLE, KY (WAVE) - One of the nation's largest for-profit colleges, ITT Technical Institute, is shutting down. The announcement came Tuesday, in the wake of major sanctions from the Department of Education.

The Louisville ITT campus on Dixie Highway is one of 130 campuses in 38 states closing its doors. Across the country that leaves more than 8,000 employees out of work and tens of thousands of students wondering what to do about tuition money they already paid.

Seven Jefferson County students filed a lawsuit against ITT in 2013 accusing school recruiters of using deceptive tactics to get them to enroll. ITT wouldn't comment at the time, and that lawsuit is still ongoing. But it was not the last complaint against ITT. 

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In April, the Accrediting Council for Independent Colleges and Schools (ACICS), which overseeing for-profit schools, called into question ITT's integrity and finances. Then in August, the Education Department said it had lost faith ITT would survive the scrutiny and banned its schools from accepting new students from using federal aid to pay for the school's tuition. That government money paid well over half the tuition bills at ITT.

ITT has also been ordered to pay hundreds of millions of dollars to the department of education to cover student refunds in case the company closed. And Tuesday, that's what happened.

In a statement posted to its website, ITT called the federal sanctions "unwarranted actions, taken without proving a single allegation" The school adding "We believe the government's action was inappropriate and unconstitutional" but acknowledged it just couldn't survive it. Read ITT's complete statement here.

So what do ITT students do now? If students paid with a federal loan they could be eligible to have those loans forgiven. Read more here. But It is unclear whether students who paid money out of their own pocket or sources like the GI Bill, will be able to get refunds.

"Based on our concerns for Kentucky students, my office is closely monitoring the situation," said Kentucky Attorney General Andy Beshear. "In fact, the Kentucky Attorney General is part of a 19-state coalition investigating ITT Tech. While it is our policy not to comment on investigations, I would encourage students to review information about ITT Tech on the U.S. Department of Education’s Website and continue to monitor that site over the next several days for updates on the issue."

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This is just the latest blow to the for-profit college industry. In September 2015, Daymar College agreed to pay $12.4 million to settle a consumer protection lawsuit brought by former Kentucky Attorney General Jack Conway. In August, the Kentucky Court of Appeals upheld a $150,000 fine against National College - now known as American National University - for refusing to adequately respond to a subpoena in a state investigation into its practices.

WATCH: Eric Flack’s report

The school can ask the Kentucky Supreme Court to take up the case. National College sued WAVE 3 News over our coverage of the accusations against it. A judge dismissed their suit, but the college is currently appealing that dismissal.

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