Bureau proposes stipulated judgment in ITT lawsuit, seeking $60 million, prohibition

A private loan program for students faces a judgment of $60 million and an injunction prohibiting the company that ran the program from offering or providing student loans ever again, the consumer financial protection agency said Monday.

In a release, the Consumer Financial Protection Bureau (CFPB) said it proposed on Monday a stipulated judgment with ITT Educational Services, Inc. to resolve a 2014 lawsuit brought by the bureau. The lawsuit alleged ITT “engaged in unfair and abusive practices” in connection with its private loan program.

The bureau said its complaint from five years ago (in federal court in Indiana) alleged that the company helped to create private loan programs for students at ITT Technical Institute, the school run by ITT until it filed for bankruptcy and ceased operations in 2016. The bureau said ITT “improperly induced students to take out those loans to pay the tuition amounts not covered by loans or other tuition assistance from the federal government.”

CFPB had also alleged that ITT knew that the student borrowers did not understand the terms and conditions of the loans and could not afford them, resulting in high default rates and other negative consequences.

CFPB proposed stipulated judgment against ITT

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