Approximately $ 330 million in debt to 35,000 students who attended the now-closed ITT Tech will be canceled thanks to a settlement in partnership with the Consumer Financial Protection Bureau, lawyers in nearly all 50 states announced this week.
For-profit college chain ITT Tech filed for bankruptcy in 2016, but its former students still faced high-interest loan payments through private lender PEAKS Trust, which was run by ITT Tech and affiliated with Deutsche Bank, according to the Ohio Attorney General̵
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“Their tactics were wild – ITT offered students temporary credit upon enrollment to be repaid next year,” Massachusetts Attorney Maura Healey wrote on Twitter. “When some students were unable to pay, the ITT allegedly pulled them out of class and threatened to expel them if they did not refinance their debt with a high-interest PEAKS loan.”
Nearly 600 students in Massachusetts received $ 5.6 million in debt relief, the Healey office said.
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“The default rate on PEAKS loans is expected to exceed 80% due to both the high cost of the loans as well as the lack of success ITT graduates had gotten jobs that earned enough to make repayment possible,” the Ohio Attorney General’s office said in a declaration. “The defaulted loans continue to affect students’ credit ratings and usually cannot be settled in bankruptcy.”
This is not the first solution that provides relief for former ITT Tech students. State attorneys generally agreed with Student CU Connect CUSO to cancel millions in debt for more than 18,000 students in 2019.
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