Former for-profit college students will have $168 million in student debt cancelled – Market Watch
The debt discharge is part of a deal between the CFPB, state attorneys general and a company that managed private student debt on behalf of ITT
More than 18,000 students who attended a now-defunct for-profit college will have $168 million in private loan debt discharged.
The loan cancellation is part of a proposed deal between the Consumer Financial Protection Bureau, attorneys general of 43 states and the District of Columbia and Student CU Connect (or the CUSO), a company that held and managed private loans taken out by students at ITT Tech. The agreement comes as the court overseeing ITT’s bankruptcy approved a settlement between CUSO and ITT’s bankruptcy trustee.
In its complaint, the CFPB outlined a scheme by which ITT students were lured into taking on high-interest private student debt managed and held by the CUSO that both the company and the school knew they probably wouldn’t be able to repay. As part of the deal, the CUSO neither admitted nor denied most of the agency’s claims.