Nevada ITT Tech students will get $6.19 million in debt relief under a settlement with 48 attorneys general.
Nationwide, the settlement will result in debt relief totaling $330 million for 35,000 borrowers. The settlement is with PEAKS Trust, a private loan program run by the for-profit college and affiliated with Deutsche Bank. ITT filed for bankruptcy in 2016.
Nevada AG Aaron Ford said ITT and PEAKS developed a plan to offer students temporary credit to cover their tuition gap between federal student aid and the cost of education.
“Thousands of Nevada students have been duped by PEAKS Trust’s mounting interest rates and predatory practices,” said Ford. He said the money will be delivered into the hands of those Nevada students. He said PEAKS knew or should have known the students would be unable to repay the temporary credit when it became due in nine months. Ford said many students complained they thought the credit was like a federal loan and wouldn’t be due until six months after graduation.
He said when the loans came due, ITT pressured students into accepting loans from PEAKS that carried high interest rates, far higher than federal loans. They threatened expulsion if they didn’t accept the loan terms. As a result, the default rate on those loans is projected to hit 80 percent.
Ford said PEAKS is foregoing collection of the loans and will cease doing business as well as send notices to borrowers about the situation. PEAKS also has to send credit agencies information about the affected borrowers.
Eligible students will receive notices of debt relief.