Forging a path to debt cancellation for former ITT Tech students

Via HLS News

A Q&A with directors of HLS Project on Predatory Student Lending

Credit: Shiho Fukada
Project on Predatory Student Lending Director of Litigation Eileen Connor, left, and Director Toby Merrill, are representing a group of former ITT Tech students in a class action lawsuit.

On Jan. 3, the Project on Predatory Student Lending of the Legal Services Center of Harvard Law School filed a 7.3 billion dollar class action lawsuit in the bankruptcy proceedings of ITT Tech, one of the country’s largest for-profit college chains, on behalf of a proposed class of hundreds of thousands of former ITT Tech students in all 37 states in which the now defunct college had operated.

The lawsuit has received major media attention—in the New York Times the Huffington Post and the Washington Post. We spoke to Toby Merrill ’11, the director of the Project on Predatory Student Lending—which she started in 2012 to fight for borrowers who have experienced unfair, deceptive, and illegal conduct at the hands of for-profit colleges—and Eileen Connor, its director of litigation, about the background and significance of the suit and about the HLS project’s involvement.

Why did the HLS Project on Predatory Student Lending get involved with this case?

CONNOR: We didn’t want one of the biggest and most predatory for-profit colleges to disappear through the liquidation process without students getting debt relief. An inaccurate narrative developed around this particular bankruptcy: ITT was a good business that was financially distressed due to regulatory overreach by the Department of Education. In fact, this business cratered because it failed and defrauded students. While in operation, ITT used aggressive tactics to silence whistleblowers and students about its illegal practices. Yet a trove of testimony had been submitted to the Department of Education by former ITT students—over 2,000. We wanted to bring these stories, and the work of student debt resisters like Debt Collective, into the public dialogue about ITT and for-profit colleges more generally.

What are the former students from ITT Tech asking for?

MERRILL: Students are seeking to establish the liability of ITT for consumer protection act and contract violations against a class of students who attended ITT over the past ten years. If successful, this Complaint will establish ITT students as creditors of the ITT bankruptcy estate. The students are also asking for a legal finding from the bankruptcy court that ITT engaged in widespread consumer protection violations against students. This finding could create a path to debt cancellation for students’ federal student loans. Under the terms of those loans, borrowers may assert state law violations including consumer protection act violations and contract violations by the school as a defense against repayment of their federal student loans. Students also seek an injunction against the continued collection of certain other debts, including debts allegedly owed to ITT and to private lenders who are functionally alter-egos of ITT.

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