Creditors, federal regulators, state attorneys general and jilted employees of ITT Educational Services have laid claim to the remaining assets of one of the nation’s largest for-profit college operators in bankruptcy court. Absent from the line of those seeking redress, however, are the thousands of students who say they were defrauded by the chain. That is, until now.
A group of former students at ITT Technical Institutes on Tuesday filed a lawsuit against the parent company to ensure participation in bankruptcy proceedings. The group is asserting claims against the company of consumer protection violations and breach of contract, and asks for class-wide status to cover anyone who attended ITT Tech in the past 10 years. The group is also seeking an injunction to stop the collection of private loans administered by ITT, which ran an in-house lending program that is at the center of two federal lawsuits.
“There are a lot of people making claims on the estate, and it’s really important to get students’ experiences out there and that they’re creditors of ITT as well,” said Eileen Connor, counsel for the students.
She estimates the students’ claims at $7.3 billion, roughly the amount of student loan revenue ITT Tech took in over the past 10 years. Connor, who is also an attorney at the Project on Predatory Student Lending at Harvard Law School, said it was critical to file the lawsuit now because the claim deadline is at the end of the month, something she suspects few students know.
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