Hundreds of former ITT Tech students in Indiana will find some ease from their student loans now that millions have been secured in a national legal settlement to cover their debt.
Indiana Attorney General Curtis Hill announced Thursday that the Hoosier state is set to receive $5.4 million in debt relief for 602 former ITT Technical Institute students in Indiana. More than $168 million has been secured for more than 22,000 former ITT students nationwide.
A settlement was agreed upon between Indiana, 44 other attorneys general and Student CU Connect CUSO, LLC, which offered loans to finance students’ tuition at ITT Tech. The school filed for bankruptcy in 2016, closing all 130 ITT campuses in 38 states, leaving nearly 40,000 students and 8,000 employees empty-handed.
“Protecting Indiana families is our top priority,” Hill said in statement. “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.”
Attorneys generals collectively alleged that ITT, with CUSO’s knowledge, offered students temporary credit upon enrollment to cover tuition gaps between federal student aid and their full education costs. That credit was due to be repaid by the following academic year, but student complaints revealed they thought the temporary credit was like a federal loan and would not be due until six months post-graduation.
The attorney generals further alleged that both ITT and CUSO knew the students would be unable to make their payments on time, Hill said. Students said they felt pressured by the school to accept the loans after being pulled out of class and threatened with possible expulsion if they did not accept the loan terms.
Neither ITT nor CUSO made students aware of what the true cost of repayment for the TC would be until after the credit was converted to a loan, Hill said.
Pursuant to the settlement, CUSO has agreed to forgo collection of the former students’ outstanding loans and will cease operations. The settlement further requires CUSO to supply Credit Reporting Agencies with information to update credit information for affected borrowers.