Student debt crisis has wide-reaching impact - WAFF-TV: News, Weather and Sports for Huntsville, AL

Student debt crisis has wide-reaching impact

(WAFF) -

They're your neighbors, colleagues at work and even parents of other children in your kid's class, and they're struggling to sleep tonight because of the staggering student loan debt they've racked up as nontraditional students.

It's a frightening predicament that you'd never want to find yourself in. But its impact is being seen far beyond the classroom.

"It is rough. I've endured so much, I've lost so much," said Nichole Mitchell.

Mitchell is frustrated to her core. She set out to become a nurse back in 2013 when she started taking classes at ITT Tech in Madison. Fast forward to now and she's passed her classes but has no degree to show for it. She'll head to bed tonight owing between $30,000 and $40,000.

"If I would have known then what I know now and knew this was going to happen, then I would not have considered going to ITT," said Mitchell.

The Madison County mom wants to pay the money back, but now she’s stuck. She and her classmates can't take their medical board exams because they have no official transcript.

"It's hard because now I'm working at a hospital not in the profession that I went to school for," said Mitchell.

The U.S. Department of Education heavily reformed for-profit schools earlier this year, in the process closing goliath ITT Tech. The nontraditional school closed all of its campuses across the country after examiners said the costs paid were much larger than the resulting student debt. Mitchell wants to be a nurse so she can help people, but now she's the one asking for help.

"A lot of borrowers at for-profit colleges are definitely in a crisis. They are not paying their loans back," said Ben Miller.

Miller is with the Center of American Progress and believes this crisis is something we all need to pay attention to. His office tracks student loan repayment at nonprofit and for-profit schools.

Most student loans are made up of federal money. That means when a student defaults on his or her payment, taxpayers, not the for-profit schools, end up with the bill.

"Unquestionably, the people making the most money off the loans are the schools. Because this is revenue for our colleges, their lifeblood without the student loan program a lot of them couldn't exist," said Miller.

ITT Tech's campuses don't exist anymore. However, their creditors still want whatever cut of assets are left. All of it is being argued in bankruptcy court.

Mitchell says a hearing is set in January on the matter, and she's hopeful that her transcripts will be released then. But for now, it's a waiting game on if or when she'll take her boards or make any payment on that $30,000 to $40,000 in student loan debt.

"I try to look at things positively,” said Mitchell. “It's hard."

In September, the same day ITT Tech closed, the U.S. Secretary of Education posted an online letter explaining ITT Tech students have two options. One included transferring to another school although student loan money and credits transferring over could be an issue. The second allowed some ITT Tech students to discharge their federal loan debt and restart their education somewhere else.

To see a step by step process of how that works click here.

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