BALTIMORE (WJZ) — Nearly 1,100 former ITT Technical Institute students in Maryland will get more than $9.4 million in debt relief following a multi-state settlement, Attorney General Brian Frosh’s office said Tuesday.
According to the attorney general’s office, students at the for-profit college were pressured to take on “predatory” loans from PEAKS Trust entities, a private loan program affiliated with Deutsche Bank.
Forty-eight attorneys general and the Consumer Financial Protection Bureau were involved in the settlement. They allege ITT Tech and PEAKS offered a “temporary credit” short-term loan to cover the gap between federal student aid and loans that they knew or should have known students would not be able to repay when it was due nine months later.
When those credits came due, even if students hadn’t graduated, the companies reportedly then “coerced” the students to take loans from PEAKS that had interest rates significantly higher than those of federal loans.
“Maryland students were deceived when they were pressured into taking on these predatory loans,” Frosh said in a news release. “PEAKS will be required by this settlement to provide debt relief to Maryland students who we allege were misled while they were working hard to further their education.”
Under the settlement, PEAKS will cease doing business and reach out to credit reporting agencies to remove references to the debts on credit reports.
ITT Tech, which had 149 locations nationwide, including two in Maryland, filed for bankruptcy in 2016.
Nationwide, the settlement involved nearly 35,000 former students and a dollar amount of more than $330 million.
Affected students should receive information from PEAKS about the settlement and can also contact the CFPB or attorney general’s office with questions.