KANSAS CITY, Mo. - The Consumer Financial Protection Bureau has filed a lawsuit against ITT Educational Services, parent company of ITT Tech, accusing the for-profit college of practicing predatory student loan practices designed to make money for the college, even while burying its students in debt.
"ITT marketed itself as improving customers’ lives, but it was really just improving its bottom line,” CFPD Director Richard Cordray said in a news conference Wednesday, warning other for-profit colleges his agency would be “vigilant about protecting students against predatory lending tactics.”
This was the agency’s first action against a for-profit college.
Missouri has four ITT campuses, two in St. Louis, and one each in Kansas City and Springfield.
“Because of the potential impact on many Missourians, we joined the multi-state investigation into the business practices of for-profit colleges,” Missouri Attorney General Chris Koster said in a statement. “Students seeking to improve their lives should be able to rely on representations made to them and not worry about being misled into massive debt.”
ITT-Tech tuition costs are among the highest in the country. One student at the Kansas City branch on Wednesday night told 41 Action News his two-year associate degree would cost roughly $50,000-- more than double the national average for that type of degree.
The CFPD suit alleges ITT Tech’s internal projections showed they fully believed 64 percent of students would default on their loans.
Chris Oswalt completed his associates degree at ITT, then left its Business Administration program after one quarter.
“I have a degree from them that isn't worth squat,” Oswalt told 41 Action News via email. “It was a complete scam.”
On Wednesday ITT called the allegations against it “without merit,” and promised a more robust defense of its business practices on Thursday.