For former students of the now defunct ITT Technical Institute, there’s finally some good news: A nationwide settlement will be cancelling the most burdensome student loan debts these students took on.
As part of a nationwide settlement in a lawsuit brought by several attorneys general, the predatory loans offered by ITT Tech through Student CU Connect CUSO LLC will be cancelled. This settlement will cancel private student loan debt for approximately 18,000 former ITT Tech students. Notably, the federal student loans these students took out will not be affected, only the private CUSO loans.
ITT Tech students who needed to finance their educations were frequently compelled to take additional loans to cover the gap between what their federal student loans would cover and the full cost of ITT Tech. Thousands of students were offered temporary credit loans which became due in a year. When students couldn’t repay, the school pressured students into taking CUSO loans at unfavorable rates and terms -- or face expulsion. What’s worse, ITT’s credits were nontransferable, so students couldn’t resume their education elsewhere.
The CUSO loans carried very high interest rates, which, coupled with ITT Tech graduates' lack of success finding jobs that paid well enough to pay their loans, led to very high default rates on the CUSO loans.
If you are one of the thousands of students still saddled with CUSO loans from ITT Tech, it might be wise to make sure your next payment doesn’t go through. Remove your payment information and stop your auto-pay. That’s because CUSO will be cancelling all remaining debts within the next 30 days as well as reporting the cancellation of the debt to credit reporting agencies. They will also be sending the student borrowers notices. Borrowers don’t actually have to do anything, but if you do notice that your CUSO loan is still active in a month, you may want to make sure you didn’t get missed in the cancellation. Sadly, there is no information about refunds for those borrowers who have already paid significant sums of money towards those loans, or what will happen to those students who have consolidated their student loan debt.