Pennsylvania Attorney General Josh Shapiro announced $168 million debt relief for 18,000 former ITT Technical Institute students across the country, including 570 former ITT Tech students in Pennsylvania.
ITT Tech took advantage of thousands of students and “aggressively pressured students to take predatory loan options and deceived them about the conditions of their loans," Shapiro said in a statement.
According to the settlement, ITT Tech targeted "low-income" students who could not afford to pay tuition out of pocket and relied on federal loans to pay the school.
As of result, Shapiro said many Pennsylvania students were left with a burden of loans with high interest rates and struggled to find jobs.
Shapiro worked with a bipartisan coalition of 43 other attorney generals from across the nation to negotiate a settlement with Delaware-based Student CU Connect CUSO, LCC, or CUSO, the holder of private loans for students at ITT Tech.
In Pennsylvania alone, some 570 students are eligible for $5.3 million in debt relief.
The attorneys general alleged that ITT Tech, with CUSO’s consent, offered students temporary credit during enrollment period to cover the difference between tuition and federal student aid. The students were responsible for paying the temporary credit before their next academic year.
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However, students complained that they were under the impression that the temporary credit was like a federal loan where payments would not be due until six months after graduation.
Neither ITT Tech nor CUSO explained to the students what the actual cost of repayment for the temporary credit would be until after the credit was converted to a loan, according to Shapiro's office.
ITT Tech allegedly pulled out students from class and threatened to expel them if they refused to accept the terms and conditions of the loans.
Due to ITT Tech’s nontransferable credits, several students agreed to the CUSO loans, which had more higher interest rates than federal loans, Shapiro said.
CUSO agreed to waive the outstanding student loans under the terms of the agreement.
ITT Tech has since filed for bankruptcy and closed in 2016.
