FORT WAYNE, Ind. (WPTA21) — 602 former ITT Tech students in Indiana will no longer have a pressured loan weighing on them thanks to a multistate settlement.
Indiana Attorney General Curtis Hiss announced the settlement, which will result in more than $168 million of debt relief nationwide for more than 22,000 former ITT students. This includes $5.4 million in debt relief for 602 former Indiana ITT Tech students.
The settlement comes after an agreement between the Student CU Connect CUSCO, LLC (CUSO) and the U.S. Bankruptcy Trustee.
CUSO offered loans to finance students’ tuition at ITT Tech, the failed for-profit college. The attorney general said ITT offered students temporary credit to cover the gap in tuition between federal student aid and the full cost of education.
While the credit was due before the students’ next academic year, the attorney general said ITT and CUSO knew, or should have known, most students would not be able to repay the temporary credit when it became due.
The attorney general said students told them ITT pressured and coerced students into accepting loans from CUSO. This included pulling students out of class and threatening to expel them if they did not accept the loan terms.
The attorney general said the students were left with the choice of dropping out and losing all benefits of the credits they earned or securing the loans.
Most students chose the loans, but ITT and CUSO but did not tell them what the true cost of repayment for the temporary credit would be until after the credit was converted to a loan.
“Protecting Indiana families is our top priority,” Attorney General Curtis Hill said. “This settlement holds CUSO accountable for its participation with ITT in subjecting ITT students to abusive lending practices, and it provides relief to hundreds of Indiana students who attended ITT Tech and incurred massive debts for an education and loans they could not repay nor discharge.”
Under the settlement, the CUSO agreed to forgo collection of the outstanding loans. The CUSO will also cease doing business. The settlement also requires the CUSO to supply credit reporting agencies with information to update credit information for affected borrowers.