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    Plan to bring relief to ITT students gets preliminary OK

    The Chantilly, Va., Campus of ITT Technical Institute was one of 137 that closed in 2016.
    Washington Post photo by Jahi Chikwendiu
    The Chantilly, Va., Campus of ITT Technical Institute was one of 137 that closed in 2016.

    A federal bankruptcy judge Wednesday gave preliminary approval to a settlement that would wipe out nearly $600 million in private loans owed by students who attended the now-defunct ITT Technical Institute, offering relief to consumers in Massachusetts and elsewhere who claimed they were defrauded by the for-profit chain.

    The settlement, which will probably be finalized by the Indiana judge in June, acknowledges that the students who attended the college between 2006 and 2016 have a $1.5 billion claim against ITT. That means if any money is left over from the school’s assets after its bankruptcy, students could receive a share.

    Students who continued to pay their loans to ITT, even after the bankruptcy, will also get almost all of their $3 million back, according to the settlement.

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    “ITT perpetrated a massive fraud on students, lying to them about everything from tuition costs to their own accreditation status, and left thousands of students in massive debt that they never should have had,” said Eileen Connor, a director of litigation at Harvard University’s Project on Predatory Student Lending. The center, along with law firm Jenner & Block, represented former students in the case.

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    ITT abruptly shut down its 140 campuses in 2016, leaving tens of thousands of students in the lurch. In Massachusetts, more than 560 students, many of them low-income or veterans, attended ITT campuses in Norwood and Wilmington when the school closed.

    The settlement will cancel only loans ITT made directly to students and still held by the school. Those loans, usually a few thousand dollars, were meant to close any gaps in funding between what students could pay out of pocket for tuition and fees and what was covered by their much-larger federal loans.

    Many of the student who attended ITT and other for-profit schools that closed, or that state and federal regulators found had committed fraud, are still waiting for relief from their federal student loans.

    Deirdre Fernandes can be reached at deirdre.fernandes@globe.com. Follow her on Twitter @fernandesglobe.