Thursday, February 27, 2014
Associated Press
WASHINGTON
The Consumer Financial Protection Bureau filed suit Wednesday against a large, for-profit college chain alleging that it pushed students into high-cost private student loans knowing they likely would end in default.
ITT Educational Services Inc. projected a default rate of 64 percent on the loans it provided, some of which had interest rates as high as 16 percent, the bureau said. The Carmel, Ind.-based company has about 150 institutions in nearly 40 states, including Ohio, operating as ITT Tech, Daniel Webster College and other entities.
Tuition at the chain’s colleges can go as high as $88,000 for a bachelor’s degree and $44,000 for an associate degree, according to the bureau.
The lawsuit, filed in federal court in Indiana, is the bureau’s first action against a for-profit college. It seeks restitution for victims, an injunction against the company and a civil fine.
Nicole Elam, a vice president with ITT, said in an email that the bureau’s claims are without merit.