Attorney General Jim Hood issued the following statement.
Following
a settlement with a private student loan lender, 82 former ITT Tech
students in Mississippi will receive a combined total of $753,821.22 in
debt relief, Attorney General Jim Hood announced.
The settlement is
with Student CU Connect CUSO, LLC (“CUSO”), which offered loans to
finance students’ tuition at ITT Tech, the failed for-profit college.
ITT filed bankruptcy in 2016 amid investigations by state
attorneys general and following action by the U.S. Department of
Education to restrict ITT’s access to federal student aid. The CUSO Loan
program originated approximately $189 million in student loans to ITT
students between 2009 and 2011.
This multistate
settlement included 43 states and the District of Columbia and resulted
in more than $168 million in debt relief for more than 18,000 former ITT
students nationwide.
“People make many
sacrifices in order to obtain a college degree with the hope of one day
having a successful career and the ability to support their family to
show for those sacrifices,” General Hood said. “What
CUSO and ITT Tech did is wrong, and I am proud that we have made them
pay for the damages they caused people who were simply trying to better
themselves. I hope this does not deter these individuals from seeking a
higher degree at a legitimate college that
does not partner with abusive lenders.”
The attorneys
general alleged that ITT, with CUSO’s knowledge, offered students
Temporary Credit (TC) upon enrollment to cover the gap in tuition
between federal student aid and the full cost of the education. The
TC was due to be repaid before the student’s next academic year,
although ITT and CUSO knew or should have known that most students would
not be able to repay the TC when it became due. Many students
complained that they thought the TC was like a federal loan
and would not be due until six months after they graduated. When the TC
became due, however, ITT pressured and coerced students into accepting
loans from CUSO, which for many students carried high interest rates far
above rates for federal loans.
Pressure tactics
used by ITT included pulling students out of class and threatening to
expel them if they did not accept the loan terms. Because students were
left with the choice of dropping out and losing any benefit
of the credits they had earned – ITT’s credits would not transfer to
most other schools – most students enrolled in the CUSO loans. Neither
ITT nor CUSO made students aware of what the true cost of repayment for
the TC would be until after the credit was converted
to a loan. Not surprisingly, the default rate on the CUSO loans was
extremely high (projected to exceed 90%) due to both the high cost of
the loans as well as the lack of success ITT graduates had getting jobs
that earned enough to make repayment feasible.
The defaulted loans continue to affect students’ credit ratings and are
usually not dischargeable in bankruptcy.
Under the
settlement, CUSO, under threat of litigation, has agreed that it will
forego collection of the outstanding loans. CUSO, which was organized
for the sole purpose of providing the ITT loans, will also cease
doing business. Under the Redress Plan, CUSO’s loan servicer will send
notices to borrowers about the cancelled debt and ensure that automatic
payments are cancelled. The settlement also requires the CUSO to supply
Credit Reporting Agencies with information
to update credit information for affected borrowers.
Students with
questions about their rights under the settlement will receive
information in the notices that are sent. Any questions about such
notice or the status of an account may be directed to Student CU Connect
CUSO, LLC at 1-877-662-2470 or
customerservice@
In addition to
this settlement, General Hood obtained approximately $3,087,519 in debt
relief for 1,858 former Mississippi students of Career Education Corp.
in a January 2019 settlement.
14 comments:
Sounds reasonable. However, the proposed plan of the Federal government to forgive massive amounts of student loans is totally unreasonable. In the first place there are entirely too many kids going to college. As Judge Smails so eloquently put it "the world needs ditch diggers too". And the reason all these kids are going to college is that the Feds got into the student loan business. If a kid wants to go to college, start saving early, work your way through high school instead of playing year-round sports, and work your way through college. It can be done.
Well done Jim Hood.
This is true leadership.
@11:04
Tongue-in-cheek I hope.
Mississippi's public schools graduate students who are unable to find Mississippi on a world map and can't count change back for a $5.35 sale from a $20 bill but the parents want them to get a college degree while gaming and texting on i-phones are the greatest talents developed by the time they finish their senior year.
I do wish that Mississippi would come down hard on education at every level and slam the colleges and universities that lure students and their families to spend $thousands for often useless class time or worse yet time on the internet faux classrooms. How has America allowed phony universities and technical schools to rob so many? Even veterans have been robbed of their GI Bill benefits for being suckers to the television and internet marketing.
11:27 AM
no..it wasn't tongue in cheek or sarcastic at all.
this actually helps people who were scammed.
that is a good thing.
because you are a douche you cannot see the good in anything a political opponent does...you are brain washed.
sad
How much work 11:40 do you think Jim Hood actually put in on this effort?
I'm confused. This was a federal law suit against ITT Tech and its lenders. How did Hood have anything to do with the outcome besides announcing the verdict in a press release?
11:40 - I agree with you. 11:27 is a hopeless troll who probably worships Alex Jones as his patron saint.
I know General Hood personally. He's a good man, smarter than most of the other gubernatorial candidates, and would serve our state well.
That said, Bill Waller is also a good man, smart, and would serve us well.
I don't know yet which one I will vote for.
Reading posts like yours here gives me hope for the state 1:09. While I lean slightly left of center on some issues and have a high regard for the AG, Bill Waller impressed me 50 years ago at MSU.
Voting in lock step with the Neo Conservative Republicans these days is as foolish as voting in lockstep with the Dixicrats was 60 years ago. Then and now the blind supporters of state politics were all stuck on the same issue and that issue keeps us at the bottom. Only when climbing out of their Ross Barnett bunkers can voters see past the smoke screen that hides the answers to our problems.
Guess the hardest work AG Hood had to do on this effort was writing the press release so that he could pat himself on the back - for the work done by the federal folks.
Congratulations Hood - you did a good job staying out of the way of this mess.
Rod Knox, if you are "left of center" (your definition, others might disagree that it is not quite descriptive based on earlier comments) I am sure that you would find either Waller, or Hood to your liking; Waller being more of a Democrat (as his voting record indicates) than the "conservative Republican" his boy Josh Gregory has tried to label him as.
Mississippi politics has been stuck on stupid for decades it seems 5:03 and I am proud to see that there is a noticeable, albeit barely noticeable,shift toward sanity. Personally I see Tate Reeves as a cheap sell out for the lowest base while both Hood and Waller appear realistic in their appraisal of the state's informed voters and on critical issues they likely have a great deal in common. Both parties have constituencies that in my opinion are off the rails and I feel that neither Waller nor Hood feels compelled to fall in line to support their party's outrageous causes. But then I've been wrong a few times as I recall. I certainly won't make the same mistake next November that I made in 2016.
I’m voting for Waller Most of the people I know are voting for Waller. Unfortunately most of the people I know are not in the majority who elect the governor. Hood is the trial lawyers boy. Tate is worried about car tags. Hood is arrogant. Tate needs to grow up.
I've see Waller speak a few times and I get a sense that he'd rather be at home relaxing and than running for governor because a certain crew of leeches needed one more big contract under their belt before Phil's well runs dry. One of the most unimpressive candidates for governor I've seen in a while. And to save you the time:
- I'm not a liberal
- I'm not for Tate
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