A group of 22 state Attorneys General have sent a letter to the Department of Education seeking information “to determine whether the [ED] is providing relief to thousands of former ITT Tech students as required by federal law.” The use of the seals of the Kentucky, Massachusetts, and Oregon AGs on the first page of the letter suggests that these AGs are taking the lead on the inquiry.… Continue Reading
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Collection of ITT student debt barred in class action settlement
By John L. Culhane, Jr. on
The saga of ITT Educational Services, Inc. appears to be drawing closer to an end, with ITT’s bankruptcy trustee and attorneys for former ITT students entering into a proposed class action settlement that would permanently enjoin the trustee’s “collection, assignment, or transfer” of approximately $560 million in receivables resulting from financing provided by ITT to students to pay for tuition and other costs. … Continue Reading
For-profit education company sued by CFPB seeks dismissal of complaint
By John L. Culhane, Jr. on
ITT Educational Services, the defendant in the CFPB’s first enforcement action against a for-profit education company, has filed a motion seeking dismissal of the CFPB’s complaint. Filed this past February in an Indiana federal court, the CFPB’s complaint accused ITT of violating the Dodd-Frank ban on unfair, deceptive, or abusive practices (UDAAP) by misleading borrowers about job placement rates and salaries after graduation, misrepresenting information about accreditation and the transferability of credits, and strong-arming students into high-interest loans that the company knew students would be unable to repay.… Continue Reading
CFPB files enforcement action against for-profit education company over alleged predatory lending tactics
By John L. Culhane, Jr. on
Posted in Regulatory and Enforcement, Student Loans
After hinting for months that it intends to use its enforcement powers to police lending in the higher education arena, the CFPB dropped the hammer on ITT Educational Services, filing suit against the for-profit college over alleged predatory lending practices.
On February 26, the CFPB filed a complaint against ITT in the Southern District of Indiana, accusing the educator of violating the Dodd-Frank ban on unfair, deceptive, or abusive practices by misleading borrowers about job placement rates and salaries after graduation, misrepresenting information about accreditation and the transferability of credits, and strong-arming students into high-interest loans that the company knew students would be unable to repay.… Continue Reading