Attorneys general from New York state and New Jersey have each reached settlements with companies involved in predatory student loan practices that will benefit their victims.
New Jersey Attorney General Gurbir Grewal negotiated $1.85 million in student loan forgiveness for more than 200 New Jersey borrowers who borrowed from private education lender PEAKS Trust 2009-1 to finance attendance at ITT Tech. The for-profit school filed for bankruptcy in 2016.
PEAKS will end all collection efforts for the loans at issue, accept no further payments and dissolve as a business. It is also required to update borrowers’ profiles with credit reporting agencies.
The forgiveness is part of a large roughly $330 million nationwide settlement reached for 356,000 borrowers who had been enrolled at ITT Tech, and it’s the second settlement AG Grewal reached with a lender financing attendance at the school. The earlier settlement was with Student CU Connect CUSO LLC, a consortium of credit unions that offered loans to finance tuition at ITT Tech.
To date, Grewel has secured over $20 million in student loan relief for over 6,000 state residents who attended for-profit colleges that engaged in unfair and deceptive loan practices.
His New York counterpart, Letitia James, who has also sought and won relief for student loan borrowers subjected to predatory lending practices, announced a settlement with Transworld Systems, the debt collector for National Collegiate Student Loan Trusts.