Former ITT Nevada Students To Get $ 6.2 Million In Debt Relief
The Nevada alumni of the bankrupt ITT Tech Institute will receive $ 6.2 million in debt relief under a $ 330 million national judgment announced Thursday.
Nevada was one of 48 states that settled with PEAKS Trust, a subsidiary of Deutsche Bank that loaned college alumni for profit.
“Thousands of Nevada students have been duped by the rising interest rates and predatory practices of PEAKS Trust,” Nevada Attorney General Aaron Ford said in a statement. His office said 687 former students would receive debt relief as part of the settlement.
“Voluntary Compliance Assurance” agreement signed by the Nevada attorney general’s office and a Deutsche Bank lawyer describes ITT’s business model as targeting low-income students who could not cover the difference in fees ITT tuition fees and loans available at the federal level.
PEAKS had only one client base of borrowers, ITT students, and the money could only be spent to pay ITT. The for-profit college “forced” students to borrow more money than they could afford to repay, the agreement says.
According to the attorney general’s office, PEAKS must notify borrowers that their debt has been canceled and also cancel automatic payments. Under the regulations, PEAKS must also inform credit organizations that borrowers’ debts have been canceled.
Last year, former Nevada ITT Tech students benefited from a similar regulation with another lender, CUSO, LLC. Under this June 2019 settlement, 335 former students received $ 3.4 million in debt relief.
ITT was just one of many for-profit schools, many of which are also now defunct, that have come under fire for putting students in debt with debts on the one hand and worthless degrees on the one hand. other. Some of them were giants, like Corinthian College, which left hundreds of thousands of students in debt and an education of little value after its closure. Others were smaller, like Brightwood College, which closed in southern Nevada after losing accreditation.
As demands for consumer protection mounted from students enrolled in for-profit colleges, the Obama administration implemented a system of loan cancellation for institutional misconduct. But Trump administration Education Secretary Betsy DeVos rewrote the rule from the Obama era.
The House and Senate both voted in favor of DeVos overturning Obama’s so-called “borrower defense” rule, but failed to override a presidential veto.