WASHINGTON – The Consumer Financial Protection Bureau says it has filed a lawsuit against a large for-profit college chain alleging that it pushed students into high-cost private student loans knowing they would likely end in default.
The bureau says Indiana-based ITT Educational Services projected a default rate of 64 per cent on the loans it provided, some of which had interest rates as high as 16 per cent. ITT Educational Services has about 150 institutions in nearly 40 states, according to the bureau.
This is among the first such actions the bureau has taken against a for-profit college. It seeks restitution for victims, an injunction against the company and a civil fine.
An ITT company spokeswoman says the bureau’s claims are without merit, but she wouldn’t comment further on pending litigation.