Approximately $ 330 million of debt for 35,000 students who attended the now closed ITT Tech will be canceled thanks to a partnership agreement with the Consumer Financial Protection Bureau, announced this week by attorneys general of nearly all 50 states.
The for-profit college chain ITT Tech filed for bankruptcy in 2016, but according to the Ohio Attorney General’s Office, its former students still had to pay high-interest loans through the private lender PEAKS Trust, which is managed by ITT Tech and affiliated with Deutsche Bank.
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“Their tactics were wild: ITT offered students temporary credit upon enrollment to be repaid the following year,”
Nearly 600 Massachusetts students received $ 5.6 million in debt relief, Healey’s office said.
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“The default rate on PEAKS loans is projected to exceed 80%, due to both the high cost of loans and the lack of success ITT graduates have had in getting jobs that have earned enough to make repayment possible. “, the Ohio Attorney General’s Office said in a statement. “Defaulting loans continue to affect student credit ratings and are usually not payable in the event of bankruptcy.”
This isn’t the first deal to provide relief for ITT Tech alumni. State Attorneys General agreed with CU Connect student CUSO to clear millions of debts for over 18,000 students in 2019.
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