Nearly 600 former ITT Technical Institute students in Massachusetts will receive a total of more than $5.6 million in the form of debt relief.
The news, announced Tuesday by Attorney General Maura Healey’s office, comes as part of a $330 million federal and multi-state settlement between 48 attorneys general and PEAKS Trust, a private loan program run by the defunct for-profit college. The settlement affects more than 35,000 students nationwide.
ITT Tech closed in 2016, leaving students with debt but without degrees. Regulators have alleged it preyed on low-income students.
Healey’s office says ITT Tech offered students temporary credit to cover the gap between federal student aid and the full cost of an ITT education. Then, with the knowledge of PEAKS Trust, students were required to pay back the money the following year, although most were unable to repay that quickly.
Healey’s office said that in those instances, “ITT often allegedly pulled students out of class and threatened to expel them if they did not refinance their debt with a high-interest PEAKS loan.”
“Students looking to further their education received nothing but low-quality programs from ITT Tech and were forced into high-interest loans they couldn’t afford to pay,” Healey said. “This settlement demonstrates our office’s work in making sure struggling student borrowers get the relief they deserve.”
Healey filed a lawsuit against ITT Tech in 2016, and it continues both in state Superior Court and in US Bankruptcy Court. Healey was also part of a similar multi-state settlement involving another ITT lender last year, in which nearly 200 students in Massachusetts had $1.6 million of debt canceled.
Anissa Gardizy can be reached at firstname.lastname@example.org. Follow her on Twitter @anissagardizy8 and on Instagram @anissagardizy.journalism.