CFPB Accuses For-Profit College Company of Predatory Lending

What's Hot


How to Cut the Cable TV Cord in 2017Family

8 Major Freebies and Discounts You Get With Amazon PrimeSave

Study: People Who Curse Are More HonestFamily

8 Creative Ways to Clear ClutterAround The House

15 Things You Should Always Buy at a Dollar StoreMore

Pay $2 and Get Unlimited Wendy’s Frosty Treats in 2017Family

5 Reasons to Shop for a Home in DecemberFamily

This Free Software Brings Old Laptops Back to LifeMore

Should You Donate to Wreaths Across America? A Lesson in Charitable GivingAround The House

6 Reasons Why Savers Are Sexier Than SpendersCredit & Debt

Resolutions 2017: Save More Money Using 5 Simple TricksCredit & Debt

10 Free Things That Used to Cost MoneyAround The House

7 New Year’s Resolutions to Make With Your KidsFamily

10 Simple Money Moves to Make Before the New YearFamily

The 3 Golden Rules of Lending to Friends and FamilyBorrow

The Consumer Financial Protection Bureau filed suit against ITT Educational Services, accusing the for-profit company of making predatory loans to its students.

The federal Consumer Financial Protection Bureau has filed a civil lawsuit against ITT Educational Services, a for-profit college company that operates 149 schools in 40 states.

The lawsuit reportedly accuses ITT of pressuring students into predatory loans and misleading consumers about their colleges’ accreditation, job placement rates, and the transferability of credits. The suit seeks a civil fine, an injunction against the company, and restitution to students allegedly harmed by ITT’s private loan programs.

At ITT, federal aid typically can’t cover the full cost of a program, so students are forced to find other ways to pay for their tuition. According to The Wall Street Journal:

The CFPB’s suit alleges that ITT encouraged new students to enroll at the college by providing funding for this tuition gap with a zero-interest loan. This loan typically has to be paid off at the end of the student’s first academic year, though ITT knew many students couldn’t repay, the CFPB said.

It’s alleged that when they couldn’t pay, many “were pushed into a long-term, private, ITT-backed loan with interest rates as high as 16.25 percent,” according to the Los Angeles Times.

In a press conference, CFPB director Richard Cordray described the abuse of students by the for-profit college industry as “truly an American tragedy,” said The Huffington Post. “While many students got poorer, the investors and shareholders got richer,” Cordray said.

ITT’s tuition is among the highest in the U.S. for for-profit colleges. An associate degree can cost upward of $44,000, while a bachelor degree program can exceed $88,000, the CFPB said.

A spokeswoman for ITT told the LA Times, “We believe that the bureau’s claims are without merit and … we intend to vigorously defend ourselves against the charges.”

The ITT lawsuit is the latest step in a for-profit college crackdown, headed by state and federal regulators, like the CFPB. For-profit college students receive about $30 billion annually in taxpayer-funded loans.

Kentucky Attorney General Jack Conway, who heads a group of 32 attorneys general investigating for-profit colleges, told the WSJ: “Some of these schools are more interested in getting their hands on federal and state dollars than educating students.”

What do you think of the CFPB’s lawsuit against ITT? Share your comments below or on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: The 3 Golden Rules of Lending to Friends and Family

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,797 more deals!