Texas Attorney General Gets Settlement for Former ITT Students

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The for-profit technical institute closed in 2016. Tuition was expensive and it had the industry's highest rate of loans that went into default within two years of attendance.

The 27 million dollar plus settlement agreement is with PEAKS Trust, a private loan program run by ITT Tech and affiliated with Deutsche Bank Entities.

After the 2008 financial crisis, ITT developed a plan with PEAKS to offer students temporary credit to cover the gap in tuition between federal student aid and the full cost of the education.

However, when the temporary credit became due, ITT pressured and coerced students into accepting high-interest loans from PEAKS, including threatening expulsion.

Ken Paxton's spokesman Alejandro Garcia says "Students shouldn't face a choice of enrolling in unfair loans or dropping out and losing their hard earned credits. This sends a clear message that attempting to deceive and financially abuse students will not be tolerated in Texas."

Nationally, tens of thousand of former ITT Technical Institute are now free from having to pay $330 million in private student loans.

Time magazine ranked it No. 2 on its list of "The 5 Colleges That Leave the Most Students Crippled By Debt."