ITT Tech students in Arizona to receive millions in loan relief
PHOENIX – Over 1,100 ITT Technical students in Arizona who fell victim to predatory loans will receive $7.8 million in debt relief, according to Arizona Attorney General Mark Brnovich.
The settlement, in conjunction with 48 attorneys general and the federal Consumer Financial Protection Bureau, will provide $330 million of debt relief for 35,000 borrowers with outstanding balances nationwide.
“The predatory tactics ITT used to manipulate students are unacceptable,” Brnovich said in a press release. “This settlement provides much-needed relief to those victimized by the college and lending entity.”
According to the release, ITT Tech worked with PEAKS Trust, a private loan program that loans to for-profit institutions, to develop a plan to offer students temporary credit to cover the gap in tuition between federal student aid and the cost of education.
Many students believed the temporary credit acted like a federal loan and would not be due until six months after graduation.
When the temporary credit was due, ITT pressured students into accepting loans from PEAKS with high-interest rates, which were much higher than federal loans.
A lot of the students who were pressured into the high loans were from low-income backgrounds and faced taking on the loans or dropping out, according to the Assurance of Discontinuance filed from the settlement.
Under the settlement, PEAKS agreed to forgo collection on all outstanding loans and cease doing business.
Students will be contacted directly if they have been affected and a notice will explain their rights under the settlement.
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