Former Texas ITT Students to Receive $27 Million in Debt Relief Settlement
Press Release
AUSTIN – Attorney General Ken Paxton announced a settlement agreement with PEAKS Trust, a private loan program run by ITT Tech and affiliated with Deutsche Bank entities, granting over $27 million in debt relief to former ITT students in Texas. This is the second settlement of its kind in just two years. In June 2019, Attorney General Paxton participated in a $168 million settlement with Student CU Connect CUSO, resulting in debt relief for 18,664 former ITT students.
“I am proud to hold ITT accountable for its deceptive trade practices and provide relief for students who were burdened with unfair student loan debt while pursuing and honest education,” said Attorney General Paxton. “Students should not face the choice of enrolling in unfair loans or dropping out and losing their hard-earned credits. Today’s victory sends a clear message that attempting to deceive and financially abuse students will not be tolerated in Texas.”
After the 2008 financial crisis, ITT developed a plan with PEAKS to offer students temporary credit to cover the gap in tuition between federal student aid and the full cost of the education. However, when the temporary credit became due, ITT pressured and coerced students into accepting high-interest loans from PEAKS, including threatening expulsion.
Under the settlement, PEAKS agreed to forgo collection of the outstanding loans and cease doing business. PEAKS will send notices to borrowers about the cancelled debt and ensure that automatic payments are cancelled. PEAKS is also required to supply credit reporting agencies with information to update credit information for affected borrowers. Students may direct questions to PEAKS at customerservice@peaksloans.com or (866) 747-0273, or the Consumer Financial Protection Bureau at (855) 411-2372.
Read a copy of the settlement here.