Be Wary of Loan Forgiveness Companies

  
     
September 09, 2016


September 2016 (SAN DIEGO, CA)
– According to recent news reports, ITT Technical Institute has shut down all of its campuses nationwide due to issues related to federal financial aid. Better Business Bureau serving San Diego, Orange and Imperial Counties warns students and families about loan forgiveness companies that may target former ITT Tech Students.

After months of sanctions and several years of investigations, the Department of Educatiion prohibited  the school from enrolling new students who relied on federal financial aid which was ITT Tech’s primary source of income. ITT Tech was also required to put aside millions in reserves in case the school went out of business. However, the school did not follow that requirement. As a result, ITT Educational Services – the organization’s parent company – announced its closure of all campuses on Tuesday, September 6, 2016.

The Department of Education has offered students two options: 1) Students who were enrolled at or withdrew from ITT within the last 120 days can apply to have their federal student loans erased by the Department of Education. That is an estimated $500 million worth of loans, a cost that would be covered by taxpayers and $90 million in insurance that ITT previously paid the Department of Education. 2) Contact local community colleges to inquire if their credits are transferable. If those ITT credits are transferred to the same program of studies, the loans for the credits are not eligible to be forgiven. Furthermore, the Department of Education will be holding online seminars to inform students of the options they have available.

Students may be contacted by private companies promising loan forgiveness and financial aid. BBB recommends that students be wary and proceed with caution. It is recommended that students contact the Department of Education directly to find out the legitimacy and eligibility of the programs being offered.

United States Department of Education
400 Maryland Avenue, SW
Washington, D.C. 20202
1-800-872-5327
Website: http://www.ed.gov/

Your BBB wants you to always research a company before doing business, including educational institutions. If you have any questions about the legitimacy of a company, visit their Business Review on bbb.org. Here you can see details such as length of time in business, licensing, if there are any complaints against the business and you can read customer reviews. For additional questions or concerns, call BBB’s 24-hour Customer Helpline at (858) 496-2131.

 

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