Yes, federal student loans borrowed to attend ITT Technical Institute between January 2005 and September 2016 are automatically discharged, though private loans require different actions.
The collapse of ITT Technical Institute left thousands of students with debt and useless credits. In August 2022, the Department of Education announced a massive group discharge. This action wiped out federal debt for borrowers who attended the school during a specific eleven-year window. While federal relief is automatic, private loans involve a separate, more complex set of rules involving settlements and lawsuits.
This guide explains exactly which balances disappear, how to handle private debt, and what steps you must take if your account still shows a balance.
Are All ITT Tech Loans Forgiven? – The Official Ruling
The Department of Education determined that ITT Tech misled students about their ability to find jobs and transfer credits. Based on this finding, the government approved a “group discharge.” This covers all federal loans disbursed for attendance at ITT Technical Institute from January 1, 2005, through its closure in September 2016.
This ruling applies regardless of whether you filed a Borrower Defense application. You do not need to fill out paperwork for this specific federal relief. The Department of Education instructed loan servicers to clear these balances and refund any payments made on these loans. If you attended during this window, your federal debt from ITT Tech should drop to zero.
Eligibility Criteria For The Automatic Group Discharge
You might wonder, are all ITT Tech loans forgiven? The answer depends heavily on the type of loan and the dates you attended. The automatic federal discharge is broad, but it has boundaries.
To qualify for the automatic federal wipeout, you must meet these conditions:
- Attendance Window: You attended ITT Tech at any time between January 1, 2005, and September 2016.
- Loan Type: You hold federal student loans (Direct Loans, FFEL Program loans, or Perkins Loans) managed by the Department of Education.
- Purpose: The funds were used specifically for ITT Tech tuition or expenses.
The discharge also applies to Parent PLUS loans taken out by parents to send a child to ITT Tech during this period. The relief is retroactive, meaning past negative credit reporting related to these loans gets deleted.
Breakdown Of Loan Types And Forgiveness Status
Confusion often arises because borrowers hold a mix of federal and private debt. This table clarifies which specific loan types fall under the automatic discharge and which do not.
| Loan Category | Discharge Status | Action Required |
|---|---|---|
| Direct Subsidized Loans | 100% Forgiven (Automatic) | None (Check FSA account) |
| Direct Unsubsidized Loans | 100% Forgiven (Automatic) | None (Wait for notification) |
| Parent PLUS Loans | 100% Forgiven (Automatic) | None (Applies to parent borrower) |
| FFELP (Dept. of Ed Held) | 100% Forgiven (Automatic) | None |
| FFELP (Commercial Held) | Likely Forgiven | Consolidation might speed this up |
| Perkins Loans | 100% Forgiven (Automatic) | None |
| Private Loans (Navient) | Settlement Dependent | Check specific settlement terms |
| Private Loans (Other Lenders) | Not Automatic | Monitor class action suits |
Private Student Loans And Settlement Agreements
Private lenders do not follow the same rules as the federal government. When borrowers ask, “are all ITT Tech loans forgiven?”, the answer for private debt is often “no,” unless a specific lawsuit forces the lender to cancel the debt. However, legal victories have provided relief for some.
The CUSO Settlement
A major settlement involving Student CUSO occurred in 2019. This agreement cancelled roughly $168 million in private student loans for students who attended ITT Tech. Under this settlement, borrowers did not receive refunds for past payments, but their remaining balances were wiped clean. This applied to students who were pressured into taking loans they could not afford.
Navient Loan Cancellation
Navient, a major loan servicer, agreed to cancel $1.7 billion in private student loan debt in a 2022 settlement with state attorneys general. This settlement included many borrowers who attended for-profit schools like ITT Tech. To qualify, the loans generally had to be subprime private education loans disbursed between 2002 and 2010. Borrowers who qualified received a notification from Navient. If you hold private loans outside these specific settlements, you likely still owe the debt.
Are All ITT Tech Loans Forgiven? – Verification Steps
Even though the process is automatic, you should verify that the system worked for you. Government systems move slowly, and errors happen. You need to confirm that your balance reflects the discharge.
Check Your FSA Dashboard
Log in to your account at the Federal Student Aid website. Your dashboard lists all your federal loans. If the discharge went through, the balance for your ITT Tech loans should read $0. If you still see a balance, check the details of the loan. It might be a consolidation loan that includes debt from other schools. Only the portion attributed to ITT Tech gets removed.
Review Your Credit Report
The Department of Education notifies credit bureaus to remove the trade lines associated with these loans. This improves your credit score and debt-to-income ratio. Pull your credit reports from Equifax, Experian, and TransUnion. If the ITT Tech loans still appear as active or delinquent after the discharge date, you can file a dispute with the credit bureau. Attach your discharge notification letter as proof.
Refunds For Payments Already Made
A major benefit of the group discharge is the refund policy. If you made payments on your federal ITT Tech loans, the government returns that money to you. This applies to voluntary payments and involuntary collections, such as wage garnishments or tax offset seizures.
The Treasury Department issues these refunds via check or direct deposit. The process takes time because the servicer must calculate the total amount paid and send the instruction to the Treasury. Ensure your address is current with your loan servicer. Refunds do not apply to private loans or settlements like the CUSO agreement.
Understanding Borrower Defense To Repayment
The ITT Tech discharge falls under the umbrella of “Borrower Defense to Repayment.” This rule allows borrowers to seek forgiveness if a school defrauded them. Since the Department of Education found that ITT Tech committed widespread misrepresentation regarding job placement rates, they applied this rule to everyone from the 2005-2016 era.
If you attended ITT Tech before 2005, you are not part of the automatic group. However, you can still file an individual Borrower Defense application. You must prove that the school misled you specifically. Evidence like old brochures, emails, or enrollment agreements helps your case.
What To Do If You Still See A Balance
Some borrowers check their accounts and panic because the debt remains. Several reasons explain this delay or discrepancy.
Commercial FFELP Loans
Some older federal loans are held by commercial lenders but backed by the government. These are FFELP loans. The Department has stated these are included in the discharge, but the communication between the government and private entities holding these notes is slower. Consolidating these loans into a Direct Consolidation Loan often triggers the forgiveness faster because it moves the debt directly under the Department of Education’s control.
Consolidation With Other Schools
If you mixed ITT Tech loans with loans from a community college or university into a single consolidation loan, the entire balance will not disappear. Only the percentage of the consolidation loan that paid off the ITT Tech debt gets forgiven. The servicer recalculates the new balance and monthly payment.
Tax Implications Of The Discharge
Federal student loan forgiveness is currently tax-free at the federal level. The American Rescue Plan Act of 2021 exempted student loan discharges from federal income tax through the end of 2025. You will not receive a Form 1099-C for this cancelled debt.
State taxes vary. Most states conform to the federal rules and do not tax the forgiveness. However, a few states may count the discharged debt as income. Check your state’s specific revenue department rules or consult a tax professional to avoid surprises during tax season.
Timeline For Processing Relief
The Department of Education processes these discharges in batches. This table helps you understand the various stages of relief and what they mean for your wallet.
| Status Phase | What It Means | Estimated Wait |
|---|---|---|
| Notification Sent | Email confirms you qualify for group discharge. | Immediate upon batch run |
| Servicer Processing | Lender calculates refund and zero balance. | 30 to 90 days |
| Credit Bureau Update | Trade line deleted or updated to “Paid.” | 45 to 60 days post-discharge |
| Refund Issued | Treasury sends check for prior payments. | Up to 6 months |
| Administrative Forbearance | Payments paused while paperwork clears. | Until discharge is complete |
The Impact Of The Sweet v. Cardona Case
The Sweet v. Cardona class action lawsuit played a role in pressuring the Department of Education to act on for-profit school applications. ITT Tech was listed as one of the schools in this lawsuit. If you were a class member in this case, you might have received relief through the settlement terms rather than the separate group discharge announcement.
The result is identical: full discharge and refunds. The legal pressure from this case forced the government to acknowledge the backlog of ignored Borrower Defense applications.
Avoiding Student Loan Forgiveness Scams
Scammers aggressively target former ITT Tech students. They know borrowers are waiting for relief and use that anxiety to steal money. You should never pay a fee to apply for federal student loan forgiveness. The process is free.
Watch out for callers claiming to be from “the government” who ask for your FSA ID password. Legitimate agents never ask for your password. If someone demands an upfront fee to “expedite” your discharge, hang up. These third-party companies cannot speed up the federal process. You can report these scams to the Federal Trade Commission (FTC).
Partial Discharge Possibilities
In rare cases, a borrower might receive partial relief. This usually happens if you attended ITT Tech across the eligibility cutoff dates. For instance, if you started in 2003 and finished in 2006, the loans from 2005 and 2006 qualify for the group discharge. The loans from 2003 and 2004 do not automatically qualify.
For the older loans, you must file a manual Borrower Defense application. You need to demonstrate that the school’s misconduct was happening during those earlier years. Given the consistent history of ITT Tech’s problems, such applications have a strong chance of success, but they require effort on your part.
Updates On Transcript Releases
When ITT Tech closed, many students could not access their transcripts. This made transferring credits impossible. With the loans forgiven, the need for transcripts decreases for some, but others still want to continue their education. The closed school discharge process does not generate a transcript. However, state licensing boards or the parchment storage services designated by the state where your campus was located often hold these records.
Next Steps For Private Loan Holders
If you hold private loans that were not part of the Navient or CUSO settlements, you face a harder road. Private lenders can still collect on debts even if the school defrauded you. You should review your promissory note for a “Holder Rule” clause. This legal clause preserves your claims against the school and applies them to the lender.
Consult with a consumer protection attorney who specializes in student debt. They can review your contract to see if the lender is liable for the school’s misconduct. Do not ignore letters from private lenders, as they can sue for repayment.
By understanding the scope of the federal ruling, you can stop asking “are all ITT Tech loans forgiven?” and start verifying your zero balance. The relief is real, substantial, and legally binding for the vast majority of former students.