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Kansas ITT Tech students to receive debt relief

Kansas ITT Tech students to receive debt relief

Kansas ITT Tech students to receive debt relief

Over 100 Kansas students who attended the now defunct ITT Technical Institute will be receiving debt relief of around $1 million.

It is part of a settlement between Kansas and other states with the private lender Student CU Connect CUSO, LLC, which was created for the sole purpose of providing high interest loans to students attending the failed college.  The for-profit college filed bankruptcy in 2016 after investigations began by state attorneys general and after the U.S. Department of Education restricted its access to federal student aid.

The settlement alleges that ITT Tech, with the CUSO’s knowledge, offered students what they called Temporary Credit at enrollment to cover the gap in tuition between federal student aid and the full cost to attend.  Many students felt they were led to believe that the payment for that credit would not be due until 6 months after they graduated, like student loans.

However, the credits were due immediately before the student’s next academic year.  The settlement alleges that the school and CUSO should have known that most students would not be able to repay the student credit at that time, and accuses ITT Tech of pressuring and coercing students into taking out loans to pay for the credit through CUSO, at much higher interest rates than federal student loans.

Under the settlement, CUSO will cease doing business and will stop trying to collect any further money, including terminating any automatic payments.  The company will be mailing notifications to former students, and the company will be required to notify all Credit Reporting Agencies to reflect the debt no longer exists for the borrowers.

This is the second legal settlement the state has reached with a for-profit college.  In January, Schmidt’s office obtained $2,142,116 in debt relief for 1,077 former students of Career Education Corp.

Students who have questions about the settlement, can click here for more information.  You can also contact the attorney general’s Consumer Protection Division at (800) 432-2310.

To view a copy of the settlement, click here.

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