Millions of dollars in loans at the now-defunct for-profit school ITT Technical Institute are canceled. Government prosecutors cleared $330 million in debt for 35,000 former students.
The Consumer Financial Protection Bureau with attorneys general nationwide, agreed to scratch this debt through ITT’s Peaks loan program
Court documents reveal students were coerced into taking out high-fee, high-interest rate loans with high default track records. What’s more, some students were, according to US regulators, tricked into these loans that they couldn’t afford, didn’t understand or didn’t even know they had them.
The court records go on to show that in some cases the school’s financial aid staff was able to gain unauthorized access to their accounts and e-sign the loans documents without the students’ knowledge.
ITT Technical Institute closed its doors four years ago. Just last year, the government reached a settlement with another ITT Tech lender where $168 million in loans were forgiven.
Students who had federal student loans have not had their debts forgiven though despite federal regulators admitting they were victims of “pervasive” fraud. The US Department of Education had a plan in place to aid former students, but Education Secretary Betsy DeVos walked it back.