HARRISBURG, Pa. (WHTM) — Debt relief is coming to thousands of former students at ITT Tech, a for-profit chain of vocational colleges that shut down after declaring bankruptcy in 2016.
Attorneys general from Pennsylvania and 43 other states have reached a settlement with Student CU Connect CUSO LLC, a lender that offered ITT Tech students temporary credit upon enrollment to cover the gap in tuition between federal student aid and the full cost of the education.
Pennsylvania Attorney General Josh Shapiro said the settlement holds CUSO accountable for its participation with ITT Tech in subjecting students to deceptive and abusive lending practices.
Shapiro said ITT coerced students into accepting loans with high-interest rates from CUSO. He said ITT resorted to pressure tactics, such as pulling students out of class and threatening to expel them if they did not accept the loan terms.
The default rate on the loans was extremely high due to the high cost of the loans and the lack of success ITT graduates had in getting well-paying jobs, Shapiro said.
The settlement includes more than $168 million in debt relief for more than 18,000 former students. In Pennsylvania, 570 former ITT Tech students are eligible for $5.3 million in debt relief.
ITT Tech operated schools in Harrisburg, Philadelphia, and Pittsburgh.
This article has been updated to correct the amount of the total debt relief to $168 million.