Hawkeye Reporter

Former ITT Tech students will be receiving $1.3 million in debt relief as a settlement from 48 attorneys general and the federal Consumer Financial Protection Bureau. 

The settlement, obtained by Attorney General Tom Miller, is with PEAKS Trust, a private loan program, according to a press release from Miller's website. 

“This settlement provides relief to Iowans who incurred debts for a questionable education at ITT Tech,” Miller said in the press release. “It also holds PEAKS Trust accountable for engaging in a scheme to benefit itself at the expense of students.” 

ITT Tech partnered with PEAKS to offer students credit to cover tuition, but the credit would be due back within nine months. The Assurance of Voluntary Compliance said that both the college and PEAKS should have known college students would not have been able to pay PEAKS back within nine months of receiving the credit. Many students were also under the impression the credit would work like a student loan and be due after graduation. 

"When the temporary credit became due, ITT pressured and coerced students into accepting loans from PEAKS, which for many students carried high interest rates, far above rates for 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. Many of the ITT students were from low-income backgrounds and were left with the choice of enrolling in the PEAKS loans or dropping out and losing any benefit of the credits they had earned, because ITT’s credits would not transfer to most schools," the Assurance of Voluntary Compliance states.