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Former ITT Tech students to see $24 million in student debt relief

(WDTV)
Published: Sep. 17, 2020 at 11:06 AM EDT
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TALLAHASSEE, Fla. (WCTV) - Former ITT Tech students in Florida will see more than $24 million in debt relief through a multistate action, according to Attorney General Ashley Moody.

The agreement with PEAKS Trust, a private loan program run by ITT, follows an investigation by the Florida Attorney General’s Office and the federal Consumer Financial Protection Bureau. ITT filed for bankruptcy in 2016 following investigations by state attorneys general and action by the U.S. Department of Education to restict ITT’s access to federal student aid.

Moody says she is glad the collaborative effort led to relief for those former students who are still affected financially by the high-pressure loan program.

“Students spend a great deal of time and money working towards their higher education. Many take on the burden of student loan debt for the sake of a better future. It is reprehensible for this loan program to exploit students' desire to earn a degree by coercing them into accepting loans the program knew students would not be able to pay," Moody says. “As a result, many students were left with the difficult choice of enrolling in the loan program or dropping out and losing any credits earned through the school."

According to the Assurance of Voluntary Compliance filed Tuesday, ITT and PEAKS were aware students wouldn’t be able to repay the temporary credit nine months later following college graduation.

The default rate on the PEAKS loans is projected to exceed 80%, due to both high cost of loans, and lack of ITT graduates having success landing jobs that earn enough to repay their loans, according to the attorney general’s office.

Under the agreement, PEAKS agrees that it will forgo collection of the outstanding loans and cease doing business, the press release said. PEAKS will send notices to borrowers about the canceled debt and ensure that automatic payments are canceled. The agreement also requires PEAKS to supply credit reporting agencies with information to update credit information for affected borrowers, according to the release.

Students will need to do nothing to receive the debt relief. The notices will explain their rights under the agreement. Students may direct questions to PEAKS at customerservice@peaksloans.com or (866) 747-0273, or the Consumer Financial Protection Bureau at (855) 411-2372.

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