INDIANAPOLIS, Ind. (WEHT) A $10 million settlement has been reached to give debt relief to 1,354 former ITT Technical Institute students in Indiana.
The settlement is with PEAKS Trust, a private loan program formed after the 2008 financial crisis and run by the for-profit college. ITT filed for bankruptcy in 2016, and the credits earned would not transfer to most schools.
ITT is accused of pressuring and coercing students into taking high interest loans from PEAKS. These tactics included threats of expulsion if students did not accept the loan terms.
The default rate on the PEAKS loans is projected to be in excess of 80%, due to both the high cost and the lack of success ITT graduates had getting jobs that earned enough to repay the debt.
Under the settlement, PEAKS agreed that it will not seek to collect the outstanding loans and cease operations. No action is required on the part of the students receiving the debt relief.
(This story was originally published on September 15, 2020)
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