JACKSON, Miss. (WDAM) - Former Mississippi ITT Tech students may be eligible for part of a $1.7 million debt-relief settlement between the state and the now-closed, for-profit university.
Mississippi Attorney General Lynn Fitch announced the agreement Tuesday, as part of national action brought by the Consumer Financial Protection Bureau against PEAKS Trust, which allegedly forced high-interest loans on ITT students among other predatory practices.
Mississippi was one of 48 states to join in the action.
“(This) settlement will deliver more than $1.7 million directly into the pockets of students targeted by PEAKS Trust’s predatory actions, many of whom continue to suffer the economic impacts of astronomical interest rates,” Fitch said
“This settlement should serve as a warning to other bad actors who take advantage of financially vulnerable Mississippians. My office will continue to seek justice, ensuring there are severe consequences for illegal actions against consumers in our state.”
Nationally, the settlement will result in debt relief of about $330 million for 35,000 borrowers who still have outstanding principal balances. ITT had operated a campus in Madison, Miss.
The settlement was done with PEAKS Trust, a private loan program that was run by ITT and affiliated with Deutsche Bank entities.
PEAKS was formed after the 2008 financial crisis when private sources of lending available to for-profit colleges dried up. 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.
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.
Students affected will need to do nothing to receive the debt relief. The notices will explain their rights under the settlement.