NEW YORK (WWTI) — The New York Attorney General secured an agreement with a private loan program to provide debt relief for former students.
Attorney General Letitia James announced on Septmeber 15 that an agreement has been made with PEAKS Trust to provide relief for New York students. PEAKS is a private program that is run by the the defunct college ITT Tech. The program is also affiliated with Deutsche Bank entities.
According to James, PEAKS was formed following the 2008 financial crisis to offer temporary credits to cover gaps in tuition for students while awaiting aid. The loans required students to pay back borrowed amounts in a quick turnaround. When credits were due, PEAKS provided loans for students which carried high interest rates.
Attorney General James stated that ITT “pressured and coerced” students into accepting these loans by pulling students out of class and threatening expulsion.
The national settlement reached on September 15 states that PEAKS will provide over $330 million to approximately 35,000 former students, totaling $5 million for those who reside in New York.
“New Yorkers look to institutions of higher learning to help support them in their educational endeavors, not act as bullies,” said Attorney General James. “PEAKS and ITT Tech took advantage of helpless and low-income students and threatened to kick them out of school if they didn’t take out loans at astronomical rates. Today’s settlement will finally right this wrong and provide hundreds of millions in relief to students across the country, including more than $5 million to New York borrowers, because students should never be saddled with a lifetime of debt and bad credit at the hands of predatory lenders.”
ITT filed for bankruptcy in 2016, and had 149 campuses across the country, including three in New York: in Albany, Liverpool, and Getzville.
Those who joined Attorney General James in filing today’s settlement are the attorneys general of Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia.
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