AG Jeff Landry Secures Millions From PEAKS Trust
After the financial collapse of 2008, it became more difficult for students to secure federal loans to attend for-profit colleges.
ITT Tech was accused of providing "questionable education" using loans that Attorney General Jeff Landry said would have been difficult to pay off for a variety of reasons.
To fill the tuition gap between federal assistance and the cost of courses at ITT, they created a program called PEAKS to loan students money. The rates were much higher to pay for further education, and the salaries earned based on this education would be inadequate when it came to paying the debt.
According to the Landry press release, students were led to believe one or more of the following:
The loans would not be due until after graduation
The loans were like a federal loan
They were led to believe they would get kicked out of school if they didn't sign up for a PEAKS loan.
ITT Tech and these lenders knew or should have known these students weren't going to be able to pay the loans based on the jobs they would get.
Now, all loans through these institutions have been canceled, and students don't even have to do anything to get the process rolling.
Landry was able to get just over $6.6 million to help the students. He says,
This settlement will provide much-needed relief to many Louisiana students who incurred debts for questionable education because of unethical and illegal lending practices.
As an example, there was a criminal justice program offered at some campuses of ITT that if completed, earned the student an associates degree, but you do not need that in most cases to become a police officer. The schools also never pointed out to students seeking this degree that if they didn't have a criminal history they were not employable.