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If you’re a former ITT Tech student in the District of Columbia, you may be eligible for automatic student loan debt forgiveness as part of a 44-state settlement announced today. In the settlement, Student CU Connect CUSO, LLC (“CUSO”), which offered loans to finance students’ tuition at the failed for-profit college ITT Tech, is required to provide more than $330,000 in debt relief to District students. This debt relief will help hard-working District residents who were saddled with student loans from a defunct school that engaged in abusive lending practices.

Why are CUSO student loan debts being forgiven?
The settlement with the District and 43 states, alleges that ITT, with CUSO’s knowledge, offered students Temporary Credit (TC) upon enrollment to help cover the full cost of tuition and was to be repaid before the student’s next academic year. However, ITT and CUSO should have known that most students would not be able to make this payment when it came due. In fact, 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, ITT pressured and coerced students into accepting loans from CUSO, which for many students carried high interest rates, far above rates for federal loans. ITT used pressure tactics including 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. The default rate on these loans was extremely high—nearly 90%—due to both the high cost of the loans and the lack of success ITT graduates had getting jobs that earned enough to make repayment possible. 

Is the CUSO debt forgiveness automatic?
Yes. Students with eligible CUSO loans will receive a notice from CUSO, but debts will be automatically be forgiven and credit reporting agencies will be notified. The debt forgiveness should occur within the next few months. Any loan payments that students send to CUSO or that are auto debited after this date will not be cashed or kept.

Former ITT students with specific questions can call (202) 442-9828 or email consumer.protection@dc.gov.

Online Student Loan Resources for District Residents
Student borrowers who are struggling with student loans can access free resources about repayment options and how to manage student loan debt at the Office of the Attorney General’s Student Loan Resource Page, including tips on how to avoid student loan scams.

OAG works to protect student borrowers by enforcing the law when predatory schools and lenders take advantage of borrowers and provides education resources to help borrowers understand their rights. In January 2019, AG Racine secured $2 million in debt relief to student borrowers over deceptive recruiting practices from Career Education Corporation.