Financial troubles at for-profit ITT leaves student vets vulnerable
SAN ANTONIO — A loophole in government student aid programs will prevent 12,500 student veterans from seeking lost benefits if a for-profit school is forced to close its doors, a veterans advocacy group said Friday.
The U.S. Department of Education announced this week it placed ITT Technical Institute on heightened cash monitoring, which bars any new students from using federal aid at more than 130 nationwide campuses of ITT Technical Institute, a for-profit school beset by legal and financial problems.
The vocational school is a combination of brick and mortar and online campuses with 43,000 students.
The agency has demanded $153 million to be paid in 30 days to ensure the government can reimburse students and cover loan forgiveness in the event ITT goes out of business. The company was already required to pay $94 million to the Department of Education, according to corporate filings posted Thursday.
But a loophole in how GI Bill benefits are counted as federal aid means student veterans will not be able to recoup benefits even if civilian students see their debts forgiven, said James Schmeling, executive vice president of strategic engagement at Student Veterans of America, a national veterans advocacy group.
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