More than 18,000 students who attended a now-defunct for-profit college will have $168 million in private loan debt discharged, MarketWatch.com reported. The loan cancellation is part of a proposed deal between the Consumer Financial Protection Bureau, attorneys general of 43 states and the District of Columbia and Student CU Connect (or the CUSO), a company that held and managed private loans taken out by students at ITT Tech. The agreement comes as the court overseeing ITT’s bankruptcy approved a settlement between CUSO and ITT’s bankruptcy trustee. In its complaint, the CFPB outlined a scheme by which ITT students were lured into taking on high-interest private student debt managed and held by the CUSO that both the company and the school knew they probably wouldn’t be able to repay. As part of the deal, the CUSO neither admitted nor denied most of the agency’s claims. Richard Bernard, an attorney at Foley and Lardner, representing the CUSO, wrote in an emailed statement that the CUSO worked cooperatively with the government and “is gratified” that the settlements will benefit ITT students. In its complaint, the CFPB outlined a scheme by which ITT students were lured into taking on high-interest private student debt managed and held by the CUSO that both the company and the school knew they probably wouldn’t be able to repay. As part of the deal, the CUSO neither admitted nor denied most of the agency’s claims.
