How to Get Your Part of the $168,000,000 in Private Loan Forgiveness Benefits for ITT Tech Students
As reported by MarketWatch, a new agreement between the Consumer Financial Protection Bureau, 43 States’s Attorneys General, and CU Connect (CUSO) will lead to private student loan cancellation benefits for up to $168,000,000 in debt for 18,000 former ITT Tech students.
Announced on Saturday, June 15th, borrowers who still owe money to CUSO are likely to see at least some and potentially all of that debt discharged entirely, for free, at some point in the near future.
If you’ve been struggling to get rid of your CUSO-based ITT Tech-related Private Student Loans, then this is the news you’ve been waiting for, because relief is finally on the way!
This agreement still needs to be officially approved by a Judge, but this is the biggest step towards getting the outstanding private ITT Tech debt settled after ITT Tech imploded and was force to shut down.
NOTE: This post is exclusively for people with ITT Tech-related CUSO-funded Private Student Loans. If you need help with Federally-funded loans, visit my Guide on Federal Student Loan Forgiveness for ITT Tech Students.
But Before I Explain the Details of This Program…
Let me give you one quick word of advice – even though the agreement was just announced, it could still take months, or even years, for the actual cancellation benefit to come through.
This agreement could even be turned down by the Judge who reviews it, which would mean that NONE of that $168,000 in forgiveness benefits gets distributed at all!
Which means that while you may eventually see some kind of relief from this new agreement, it could be a long time coming, or it might never materialize, so you should consider looking into alternative options for dealing with your private ITT Tech loans.If you're truly struggling with student debt, then you should also consider paying a Student Loan Debt Relief Agency for help. Why? Because the people working at these companies deal with student loans all day, every day, and they're your best chance at figuring out how to get your loans back under control.
I've interviewed all sorts of debt relief agencies over the past 10 years, talking to all sorts of so-called "experts", and I can tell you that in all honesty I've only found two companies I trust to offer actual financial relief to people struggling with student loans.
For help with FEDERAL Student Loans: Call the Student Loan Relief Helpline at 1-888-906-3065. They will review your case, evaluate your options for switching repayment plans, consolidating your loans, or pursuing forgiveness benefits, then set you up to get rid of the debt as quickly as possible.
For help with PRIVATE Student Loans: Call McCarthy Law PLC at 1-877-317-0455. They will negotiate with your lender to settle your private loans for much less than you owe (typically about 40% your total outstanding balance), then get you a new loan for the much lower, settled amount so you can pay off the old deb, repair your credit and start making much lower monthly payments. NOTE: McCarthy Law can ONLY help with Private student loans, so please do not call them if you only have Federal loans.
If you do decide to call one of these companies and you have a bad experience with either of them, PLEASE make sure to come back and let me know about it in the Comments!
Why Are Private ITT Tech Loans Being Cancelled?
This debt is being cancelled because the Consumer Financial Protection Bureau (CFPB) was able to argue that CUSO (ITT Tech’s Private Loans Provider) basically committed some kind of fraud or illegal behavior against the borrowers who hold Private Loans for ITT Tech.
Basically, the big picture story is that CUSO tricked ITT Tech Students into borrowing high interest, private loans, which they knew the borrowers weren’t going to be able to repay, and that they did this in order to saddle people with excessive debt, hit the with fines, fees, penalties, etc., to increase the amount of money they could collect from those borrowers.
The CFPB also managed to argue that CUSO did this WITH ITT Tech’s knowledge, so it wasn’t that they were doing something the school had no idea was going on, but that the two worked together to ramp up enrollments at ITT Tech and private student loan distributions via CUSO, essentially screwing student borrowers over entirely in order to make money.
To be honest, this is the same sort of scheme that’s been unraveled at several other For Profit Schools, and Private Student Loan Lenders, and no big surprise to those of us who have been following the industry for the past decade, but it is a huge agreement and a step in the right direction for helping these ITT Tech students finally get rid of their useless private student debt!
How Did the ITT Tech CUSO Scheme Work?
The way this thing worked was that ITT Tech and CUSO targeted students they knew would be able to qualify for lots of money in Federal Student Loans, but not enough to cover the full cost of the ITT Tech education programs they were interested in.
The School and Lender then basically got these students hooked up with Federal Student Loans, explained the students would need to borrow more to cover the gap between what Federal loans would fund, and what ITT Tech’s program would cost, then saddled them with a high-interest loan for that missing amount of money.
The scam got much worse in 2008, when ITT Tech started a temporary credit program that allowed students who couldn’t pay for the entire costs of their programs with Federal loans, via a no-interest loan that students would be forced to repay as a lump sum around 9 months after enrollment.
Of course, since students weren’t able to come up with this lump sum payment in such a short time period, ITT Tech then suggested that they utilize the CUSO Private Student Loans Program to come up with the money, and whatever else was needed for future ITT Tech payments, saddling these borrowers with a high-interest loan in the process.
To summarize, ITT Tech and CUSO worked together to trap students into taking out large, high-interest loans, which both companies knew those borrowers had little chances of ever being able to pay back!
What Else Did ITT Tech Do?
To further set students up so that they’d fall for the bait and switch transition to the high-interest, private CUSO loan, ITT didn’t clearly explain that the temporary credit program was a loan at all.
In fact, the CFPB was able to document that ITT Tech raced students through the process and gave them either little or wrong information about how the temporary credit program worked, again, in order to get more of them to agree to it since that was the end-goal of the ITT Tech team.
They reportedly also knew that these borrowers wouldn’t be able to come up with the funds when that 9 month temporary credit payment came due, and they further started pressuring the borrowers into converting temporary credits to more traditional private CUSO loans as quickly possible, threatening them with huge payments or expulsion as the alternatives.
Finally, they worked things out with CUSO so that any student who did take out a temporary credit from ITT Tech would be preapproved for the CUSO private student loan program, no matter what their credit history looked like.
This this worked, well, and at one point, it’s reported that nearly 80% of CUSO’s private student loan population was comprised of ITT Tech students who’d fallen victim to the scheme.
What Did CUSO Do?
CUSO was allegedly complicit with the whole program, knowing full well that the borrowers they were funding via private student loans would never be able to pay them back, but apparently not caring at all since they knew they’d make even more money when borrowers ran into trouble making their monthly payments (via fines, fees, penalties, etc.).
Furthermore, CUSO slammed these borrowers with high interest rates, as it’s been documented that around 50% of borrowers with a credit score under 600 were paying 13.75% or 16.25% interest rates on the debt, which is very high compared to Federal student loans, which would have averaged something like 5-7% for the same time period.
As ITT Tech and CUSO were planning to create this program, their own internal projections estimated that around 30% of the borrowers would default on their debt, and that nearly 60% of borrowers with a credit sore under 600 would default, but they chose to offer the loans anyway, again, in the pursuit of profits.
As I’ve outlined above, both ITT Tech and CUSO were obviously in the wrong here, just like we’ve seen with so many other For Profit Schools, Private Student Loan Lenders, Student Loan Servicing Companies and Student Loan Debt Collection Agencies.
The entire industry was basically operating on schemes, scams, and illegal or at least amoral activity throughout the 2000’s, and that’s why we’re seeing so many borrowers in such terrible situations – the fallout for these sorts of operations is likely to plague ordinary Americans for many decades to come.
What Happens Next?
You can’t take advantage of this settlement agreement yet, because it isn’t technically fully approved, as it will need to be reviewed and authorized by a Judge, but hopefully that happens soon!
In the meantime, make sure to come up with a plan for dealing with your private ITT Tech debt even if this agreement falls apart, as there are still all sorts of questions about how this benefit would be distributed, even if it did end up getting approved.
Remember, it could take months or even years before you get your loan discharged, so it’s not a good idea to simply sit around hoping that things get better – my advice is to get your loan back under control by contacting the Private Student Loan Debt Experts at McCarthy Law PLC at 1-877-317-0455.
McCarthy Law will help negotiate a debt settlement for you, typically at around 40% of what you currently owe, then get you hooked up with a new loan to replace the old one you’ve fallen behind or defaulted on, helping to restore your credit, and significantly reduce your monthly payments.
This is the advice I provide EVERYONE who is having trouble with private student loans, not just ITT Tech Students, so I would highly suggest you at least give them a call to see if they think you’re a good fit for their program, as I’ve received excellent feedback about their service.
What About Getting Help With My Federal Student Loans?
If you need Help with Federal Student Loan Debt, be sure to check out my Guides on:
- Federal Student Loan Debt Relief Programs
- Federal Student Loan Forgiveness Programs
- Federal Student Loan Bankruptcies
- Federal Student Loan Consolidations
- Federal Student Loan Delinquencies & Defaults
- Federal Student Loan Rehabilitation
- Federal Student Loan Wage Garnishments
- Federal Student Loan Deferments
- Federal Student Loan Forbearances
- Federal Student Loan Repayment Plans
And for general advice on Private student loans, not specifically related to ITT Tech or this $180,000,000 agreement…
For Help With Private Student Loans
If you need Help with Private Student Loans, then you’ll want to look at my Guides on:
- Private Student Loan Debt Relief Programs
- Private Student Loan Forgiveness Programs
- Private Student Loan Consolidations
- Private Student Loan Bankruptcies
- Private Student Loan Default Help
If you have any other questions about dealing with student loans, please post them in the Comments section below. I review Comments regularly and try to get everyone a response within about 24 hours of their posting.
Before You Go – Please Help Me Out!
This website requires a great deal of time and effort to maintain.
To be perfectly honest, I’m writing this post at 10:55PM on Saturday night, June 15th, because I saw a Google alert announcing the $180 million dollar ITT Tech agreement, so I paused the Hulu show I was watching, got out my computer, and wrote this thing up.
That’s not really how I’d like to be spending my time, but I’m willing to do it if it helps even just a couple of you get your debt back under control and start feeling like you can live your life again!
I know what it’s like to be swimming in debt, and have that problem color every single decision you make, basically ruining your life, so I’m willing to run this site in order to help others find a way out of their student debt, but it would be a lot easier for me to spend more time on this site if more people started visiting it.
Please, if the information here helped you, tell someone else that FSLD exist, and link them to a story that you think will help them!
The more people who visit my site, the more time I can spend to developing Guides like this one, for people like you!
Thanks for visiting, and thank you so much for your support!
Disclaimer:Information obtained from Forget Student Loan Debt is for educational purposes only. You should consult a licensed financial professional before making any financial decisions. This site receives some compensation through affiliate relationships. This site is not endorsed or affiliated with the U.S. Department of Education.