AG: $2.2 million in debt relief awarded to KY students

FRANKFORT, Ky. (WTVQ) — More than 300 Kentucky students who said they were pressured by the deceptive lending practices of a for-profit college are getting their loans forgiven.

Attorney General Andy Beshear says $2.2 million settlement was reached with Student CU Connect CUSO, LLC (CUSO), which offered loans to finance students’ tuition at ITT Tech locations across the country.

That includes 325 students in Kentucky.

Nationally, the settlement will result in debt relief of more than $168 million for more than 18,000 former ITT students, according to the attorney general.

ITT Tech filed bankruptcy in 2016 amid investigations by state attorneys general and following action by the U.S. Department of Education to restrict ITT’s access to federal student aid.

The investigation by the attorneys general, which began in 2014, uncovered that ITT, with CUSO’s knowledge, offered students temporary credit to cover the gap in tuition and federal student aid.

When the credit payment came due at the end of the each semester, ITT pressured and coerced students into accepting loans from CUSO, which, for many students, carried interest rates far above those of federal loans.

Pressure tactics used by ITT included pulling students out of class and threatening to expel them if they did not accept the loan terms, according to the attorney general.

The students involved in the settlement will receive notice and loans will automatically be forgiven within 30 days of the final agreement.

The settlement does not affect students’ federal loans.

Categories: News, State News

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