ITT Tech students to receive $6.8 million in debt relief
Settlement involves 43 states served by failed college.
A multi-state settlement will provide $6.8 million in debt relief to about 870 former Ohio students of the failed for-profit college ITT Technical Institute, Attorney General Dave Yost announced Friday.
The settlement is with Student CU Connect CUSO, which offered loans to finance tuition at ITT. It involves 43 states and will result in about $168 million in overall debt relief for more than 18,000 former students, the attorney general’s office announced in a news release.
In 2017, ITT closed all of its 137 campuses nationwide and filed for bankruptcy after the federal government restricted the school’s access to federal student aid. The school had been serving about 35,000 students and employed about 8,000 people.
The attorneys general of the involved states alleged ITT, with CUSO’s knowledge, offered students temporary credit upon enrollment to cover the gap in tuition between federal student aid and the full cost of their education. Many students thought the temporary credit was like a federal loan and would not be due until six months after they graduated, the news release said, but it was actually due before a student’s next academic year.
When the credit was due, ITT pressured students into accepting CUSO loans, many of which carried high interest rates. ITT and CUSO knew or should have known that most students would not be able to repay it by that time, the attorney general’s office said.
“These students were misled, pressured and sometimes threatened into borrowing from this lender,” Yost said in the news release. “They’ve had to carry the heavy weight of these unreasonable loans for far too long, but today they can finally breathe a sigh of relief.”
The CUSO loans have had “extremely high” default rates, projected to exceed 90%, due to the high cost of the loans and the difficulties ITT graduates have had finding jobs, the attorney general’s office said.
Under the terms of the settlement, CUSO has agreed to forego collection of the outstanding loans, and will cease doing business.
Former students who are impacted by the settlement will receive notices with more information.