The California State Attorney General, Xavier Becerra and 48 other states and the Consumer Financial Bureau won a $330 million settlement on behalf of students from a now-defunct for-profit “college.”
California Attorney General Xavier Becerra, along with 48 states and the Consumer Financial Protection Bureau (CFPB) on Tuesday announced a $330 million settlement with ITT Technical Institute (ITT Tech), the now-defunct predatory for-profit college, and PEAKS, its holding company. The settlement, which in California is pending court approval, resolves allegations of an illegal private student loan scheme that harmed student borrowers by misdirecting them towards expensive student loans that they struggled to repay. The settlement will automatically discharge PEAKS’ entire student-loan portfolio with loan forgiveness for anyone with an outstanding PEAKS loan. This will provide relief for more than 43,000 borrowers nationwide, including 4,000 Californians. PEAKS will also be required to shut down after carrying out the settlement.
“As students strive for a college degree, their attention should be on their studies not on being cheated by unscrupulous lenders,” said Attorney General Becerra. “Using a private lending scheme, ITT Tech saddled students with massive debt, exorbitant interest rates, and a worthless diploma. Today’s settlement removes the financial handcuffs gripping thousands of California students defrauded by ITT Tech. These students and former students can now wake up from this borrower’s nightmare. At the California Department of Justice, we will continue to crackdown on predatory for-profit colleges that focus on dollars instead of diplomas.”
Diane Ravitch's blog 
These for-profit colleges prey on working class young people and returning veterans and burden them with debt. These young people rarely get the great jobs that the schools advertise. I saw a twenty-eight year woman on the news who was working as a supermarket checker and living at home to pay off the money she owed to the for-profit college. Our country has the dubious distinction of allowing predatory schools fleece our young people and ruin their lives for many years. Many colleges in the EU and Canada offer free or low priced college so their young people so they can start life debt free. You can tell a lot about a society by how it treats its most vulnerable.
“The settlement will automatically discharge PEAKS’ entire student-loan portfolio with loan forgiveness for anyone with an outstanding PEAKS loan. This will provide relief for more than 43,000 borrowers nationwide, including 4,000 Californians. PEAKS will also be required to shut down after carrying out the settlement.”
Bravo. Good job.
U.S. Department of Education
This new school year has brought new challenges and opportunities for all of us to overcome and adapt. It’s also come with a lot of different emotions. No matter what you are feeling right now—you are not alone.
This #BackToSchool season, we are all in this together
In what way are public school students and families “in this together” with the federal government when the federal government has done nothing to assist them?
The only thing I’ve seen have been Trump political events where they attack public schools. The truth is anything public school accomplished they accomplished alone. Their government abandoned them and then just to add insult to injury decided to run a publicly-funded political campaign against them. All I saw were demands they “open” and then some kind of gibberish about history lessons yesterday. Is that “work” now?
When it comes to buying an education, the phrase “caveat emptor” comes to mind. When it comes to governing, the social contract is broken when the police power of the republic does not police the predatory forces in society. Locke said that a broken social contract justified revolution.
and not only does the current political moment not police predatory forces, it has turned itself into those predatory forces
In the current U.S. we live in, the Trump-DeVos world, do not celebrate until at least five years have passed after it is a done deal and no one has legally or illegally gone after the students that took out those loans harassing them to get the money anyway.