Former Kansas ITT Tech students receive $2 million in student-debt relief
TOPEKA, Kan. (WIBW) - Students from Kansas that attended ITT Tech will get more than $2 million in student debt relief.
Kansas Attorney General Derek Schmidt says almost 300 former ITT Tech students from across the state will get over $2 million in education loan relief as part of a settlement between the state and a private lender at the failed for-profit college.
Schmidt said the settlement released on Tuesday between Kansas, 47 other states and PEAKS Trust will see about $330 million in debt relief for 35,000 borrowers across America that have outstanding principal balances, with 290 Kansans receiving $2,015,269.84 in relief. He said PEAKS is affiliated with Deutsche Bank entities.
According to the AG, ITT filed bankruptcy in 2016 during investigations by state attorneys general and action by the U.S. Department of Education restricting access to federal student aid. He said ITT had campuses in Wichita and the Kansas City metro area.
“This settlement provides meaningful relief to Kansas student borrowers who were induced to undertake these loans through means that violated Kansas law,” Schmidt said.
Schmidt said the agreement says IT and PEAKS should have known that the students would not be able to repay the temporary credit when it became due nine months later. He said many students complained they thought the temporary credit was like a federal loan and would not be due until six months after they graduated. However, he said when the loan came due, ITT pressured and coerced students into accepting loans from PEAKS, which carried higher interest rates that were far above federal loans.
According to AG Schmidt, PEAKS was formed after the 2008 financial crisis when private sources of lending available to for-profit colleges disappeared. He said ITT created a lending program with PEAKS to offer students temporary credit to cover gaps in tuition between federal student aid and the cost of tuition.
Schmidt said students with questions about their rights under the settlement will get information in notices that will be sent. He said students may also call the Consumer Protection Division at 1-800-342-2310 or click here for more information.
According to the AG’s Office, this is the third settlement it has obtained that provides student loan relief for former students of for-profit colleges in Kansas. It said in January of 2019, it secured an agreement providing over $2 million in debt relief for 1,077 former students of Career Education Corporation and in June of 2019 won over $1 million in loan relief to 108 ITT students. It said the June agreement was with Student CU Connect CUSO, LLC, which also offered loans financing tuition at ITT Tech.
A copy of the settlement can be found here.
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