Attorney General Curtis Hill announced yesterday that the Office of Attorney General has secured an agreement to obtain $5.4 million in debt relief for 602 former ITT Tech students in Indiana as part of a bipartisan multistate settlement involving 44 attorneys general. Nationally, the settlement will result in debt relief of more than $168 million for more than 22,000 former ITT students.
The settlement is with Student CU Connect CUSO, LLC (“CUSO”), which offered loans to finance students’ tuition at ITT Tech, the failed for-profit college. ITT filed bankruptcy in 2016 amid investigations by state attorneys general and following action by the U.S. Department of Education to restrict ITT’s access to federal student aid. The CUSO Loan program originated approximately $168 million in student loans to ITT students between 2009 and 2011.
A related settlement between the CUSO and the U.S. Bankruptcy Trustee was approved on June 17th. The attorney generals’ settlement is also contingent on federal court approval of a related settlement between the CUSO and the Federal Consumer Financial Protection Bureau.
Under the settlement, the CUSO, has agreed that it will forgo collection of the outstanding loans. The CUSO, will also cease doing business. Under the Redress Plan, CUSO’s loan servicer will send notices to borrowers about the cancelled debt and ensure that automatic payments are cancelled. The settlement also requires the CUSO to supply Credit Reporting Agencies with information to update credit information for affected borrowers.