The loan cancellation is part of a proposed deal between the Consumer Financial Protection Bureau, attorneys general of 43 states and the District of Columbia and Student CU Connect , a company that held and managed private loans taken out by students at ITT Tech. The agreement comes as the court overseeing ITT’s bankruptcy approved a settlement between CUSO and ITT’s bankruptcy trustee.
The CUSO “acted properly and in good faith in entering into and administering the student loan program,” Bernard wrote. “To the extent that ITT and its management engaged in any wrongful conduct, the CUSO and these other parties were victims of, not accessories to, that misconduct.” The complaint alleges that ITT’s financial aid staff rushed students through this process and provided them with little or incorrect information about the credit program. In many cases, that meant students didn’t know they’d taken on a loan, according to the complaint. The court documents allege that ITT also knew that students wouldn’t be able to repay the loan when it came due.
The loans were pushed on students even though both the CUSO and ITT knew many borrowers would be unable to repay them, according to court documents. For the roughly 46% of borrowers with credit scores under 600, the effective interest rate on the loans was 13.75% or 16.25%, according to the complaint.
Trump University?
I made stupid decisions too, can I get a check?