ILNews

ITT agrees to pay Sallie Mae $46M to settle suit

Scott Olson
January 8, 2013
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Carmel-based ITT Educational Services Inc., one of the largest operators of for-profit colleges in the nation, has agreed to pay Sallie Mae Corp. $46 million to settle litigation related to a loan agreement between the two parties.

Wall Street reacted unfavorably to the settlement Monday, as ITT shares fell to as low as $15 each in mid-morning trading, shedding as much as 22 percent of their value. The stock traded for more than $66 a share less than 10 months ago.

Reuters reported the settlement Friday, following ITT’s announcement of the agreement in a Dec. 28 regulatory filing.

Sallie Mae, the largest U.S. student loan provider, filed suit against ITT in July 2011, alleging that it breached the terms by failing to pay some amounts on time under the agreement signed in July 2007, according to Reuters.

ITT makes agreements with some lenders, including Sallie Mae, to provide private education loans to its students.

The $46 million payment will be made by Jan. 29, ITT said in the filing. The agreement contains no admission of liability by either party.

ITT said it will record an after-tax charge of $13.2 million, or about 56 cents per share, during the quarter ended Dec. 31.

Analysts were expecting ITT to report a fourth-quarter profit of $1.88 per share, according to Thomson Reuters.

ITT has more than 140 campuses across the country. The average cost of an ITT associate's degree program is $45,000, but scholarships and grants reduce that cost on average to $27,000.

ITT's enrollment figures have been sinking over the past year, mostly because of tougher federal rules involving recruitment.

Most for-profit educators have been suffering similar fortunes. Enrollments have tumbled across the industry, also in part because of a natural receding of the wave of students who entered for-profit colleges during the recession that ran from 2007 to 2009.

But more significantly, government investigations of the industry have exposed questionable recruiting practices, sky-high student debt loads and low graduation rates. New rules placed on for-profit colleges by the Obama administration threatened to yank federal student loans for programs whose students failed to pay down their debt loads.

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  1. All the lawyers involved in this don't add up to a hill of beans; mostly yes-men punching their tickets for future advancement. REMF types. Window dressing. Who in this mess was a real hero? the whistleblower that let the public know about the torture, whom the US sent to Jail. John Kyriakou. http://www.nytimes.com/2013/01/26/us/ex-officer-for-cia-is-sentenced-in-leak-case.html?_r=0 Now, considering that Torture is Illegal, considering that during Vietnam a soldier was court-martialed and imprisoned for waterboarding, why has the whistleblower gone to jail but none of the torturers have been held to account? It's amazing that Uncle Sam's sunk lower than Vietnam. But that's where we're at. An even more unjust and pointless war conducted in an even more bogus manner. this from npr: "On Jan. 21, 1968, The Washington Post ran a front-page photo of a U.S. soldier supervising the waterboarding of a captured North Vietnamese soldier. The caption said the technique induced "a flooding sense of suffocation and drowning, meant to make him talk." The picture led to an Army investigation and, two months later, the court martial of the soldier." Today, the US itself has become lawless.

  2. "Brain Damage" alright.... The lunatic is on the grass/ The lunatic is on the grass/ Remembering games and daisy chains and laughs/ Got to keep the loonies on the path.... The lunatic is in the hall/ The lunatics are in my hall/ The paper holds their folded faces to the floor/ And every day the paper boy brings more/ And if the dam breaks open many years too soon/ And if there is no room upon the hill/ And if your head explodes with dark forbodings too/ I'll see you on the dark side of the moon!!!

  3. It is amazing how selectively courts can read cases and how two very similar factpatterns can result in quite different renderings. I cited this very same argument in Brown v. Bowman, lost. I guess it is panel, panel, panel when one is on appeal. Sad thing is, I had Sykes. Same argument, she went the opposite. Her Rooker-Feldman jurisprudence is now decidedly unintelligible.

  4. November, 2014, I was charged with OWI/Endangering a person. I was not given a Breathalyzer test and the arresting officer did not believe that alcohol was in any way involved. I was self-overmedicated with prescription medications. I was taken to local hospital for blood draw to be sent to State Tox Lab. My attorney gave me a cookie-cutter plea which amounts to an ALCOHOL-related charge. Totally unacceptable!! HOW can I get my TOX report from the state lab???

  5. My mother got temporary guardianship of my children in 2012. my husband and I got divorced 2015 the judge ordered me to have full custody of all my children. Does this mean the temporary guardianship is over? I'm confused because my divorce papers say I have custody and he gets visits and i get to claim the kids every year on my taxes. So just wondered since I have in black and white that I have custody if I can go get my kids from my moms and not go to jail?

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