CHARLESTON — West Virginia Attorney General Patrick Morrisey, together with 44 other attorneys general, reached a $168 million settlement with a loan company linked to ITT Tech.
The loan company, Student CU Connect CUSO LLC, worked with ITT Tech, a now-bankrupt for-profit college to finance students' tuition. The settlement erases debt from 61 former students in West Virginia in the amount of $508,026 for a nationwide total of $168 million for 18,664 students.
"This settlement demonstrates our office’s commitment to protect consumers and stop unfair loan practices," Morrisey said in a statement. "Those students who put forth time and effort toward a degree – and ultimately a career – only to have it interrupted in this manner deserve the relief they will receive."
When ITT Tech closed, the West Virginia Attorney General's Office assisted approximately one dozen nursing students whose licensing was jeopardized by the closure. Morrisey's office assisted the students in receiving their diplomas and the opportunity to take the state licensing program for nursing.
ITT Tech filed for bankruptcy in 2016. It did so during an investigation by several attorneys general after the U.S. Department of Education restricted the school's access to federal student aid.
The school left former students with unaffordable loans after it coerced them into entering into the loans, according to the settlement.
The attorneys general argued that ITT Tech offered students temporary credit upon enrollment to cover the gap in tuition between federal student aid and the full cost of the education. It claimed the loan company was aware of ITT Tech's actions.
The attorneys general claim the temporary credit was due before the next school year and that ITT Tech and the loan company knew or should have known the majority of the students would not be able to repay the temporary credit and many of the students complained that they had thought the temporary credit was similar to a federal loan and wouldn't become due until six months after graduation.
Once the temporary credit became due, ITT Tech coerced students to accept loans with the loan company, according to the attorneys general.
The settlement still needs to be approved by the federal court.
West Virginia joins the settlement with Alabama, Arizona, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington and Wisconsin.
