The Consumer Financial Protection Bureau (CFPB), the government agency in charge of supervising debt collection activity, has filed a lawsuit against ITT Educational Services, Inc. (ITT). The CFPB alleges that the for-profit provider of post-secondary technical education engaged in predatory lending by pushing its students into expensive private student loans that were likely to end in default. The CFPB’s lawsuit is requesting restitution for the victims, a civil fine and an injunction against the company.
The CFPB believes that the motivations of the for-profit college industry are misaligned. As a result, students are pressured into taking out costly loans, even though they are likely to end in default, because the colleges benefit. The lawsuit is the CFPB’s first public enforcement action against a company in the for-profit college industry.
ITT has 150 institutions in approximately 40 states with tens of thousands of students enrolled. ITT’s tuition costs are among the highest in the nation. In fact, the cost of an associate degree can exceed $44,000 and a bachelor’s degree can cost up to $88,000, which is significantly higher than the cost of most colleges.
Although many students take out federal student loans to pay their tuition, private student loans also provide essential revenue for ITT. When federal aid isn’t sufficient to cover the costs associated with attending college, many students look to private loans to cover the gap.
The CFPB’s lawsuit against ITT alleges that ITT:
- Pressured students into predatory loans with costly fees and interest rates
- Credits earned at ITT usually did not transfer to other colleges, which resulted in students being coerced into taking out private loans to avoid expulsion or losing money already spent
- Misrepresented the student’s ability to obtain quality employment with salaries sufficient to repay their loans
- Knew that the majority of the student borrowers would default on their loans
If you have been the victim of predatory lending or you need help dealing with aggressive or abusive student loan debt collectors, contact DeLadurantey Law Office, LLC.
At DeLadurantey Law Office, LLC, we help businesses and families find their way out of highly difficult financial situations. We provide the advice and guidance you need in obtaining debt relief through bankruptcy and debt negotiations. We can also assist you in defending a foreclosure action. Contact us at 414-377-0518 to discuss how our Milwaukee bankruptcy attorneys can assist you. Like us on Facebook.