Former Texas ITT Students To Receive $27M In Debt Relief Settlement With PEAKS Trust
Staff Report
Texas Attorney General, Ken Paxton is the lawyer for the State of Texas and is charged by the Texas Constitution to:
- defend the laws and the Constitution of the State of Texas
- represent the State in litigation
- approve public bond issues
To fulfill these responsibilities, the Office of the Attorney General serves as legal counsel to all boards and agencies of state government, issues legal opinions when requested by the Governor, heads of state agencies, and other officials and agencies as provided by Texas statutes.
The Texas AG sits as an ex-officio member of state committees and commissions and defends challenges to state laws and suits against both state agencies and individual employees of the State.
Many Texans look to the Office of the Attorney General for guidance with disputes and legal issues. The agency receives hundreds of letters, phone calls, and visits each week about crime victims’ compensation, child support, abuse in nursing homes, possible consumer fraud, and other topics.
To find out more about the Texas Attorney General, visit the official website at https://texasattorneygeneral.gov/.
Former Texas ITT Students to Receive $27 Million in Debt Relief Settlement with PEAKS Trust
AUSTIN – Attorney General Ken Paxton today announced a settlement agreement with PEAKS Trust, a private loan program run by ITT Tech and affiliated with Deutsche Bank entities, granting over $27 million in debt relief to former ITT students in Texas. This is the second settlement of its kind in just two years.
In June 2019, Attorney General Paxton participated in a $168 million settlement with Student CU Connect CUSO, resulting in debt relief for 18,664 former ITT students.
“I am proud to hold ITT accountable for its deceptive trade practices and provide relief for students who were burdened with unfair student loan debt while pursuing and honest education,” said Attorney General Paxton. “Students should not face the choice of enrolling in unfair loans or dropping out and losing their hard-earned credits. Today’s victory sends a clear message that attempting to deceive and financially abuse students will not be tolerated in Texas.”
After the 2008 financial crisis, ITT developed a plan with PEAKS to offer students temporary credit to cover the gap in tuition between federal student aid and the full cost of the education.
However, when the temporary credit became due, ITT pressured and coerced students into accepting high-interest loans from PEAKS, including threatening expulsion.
Under the settlement, PEAKS agreed to forgo collection of the outstanding loans and cease doing business. PEAKS will send notices to borrowers about the canceled debt and ensure that automatic payments are canceled.
PEAKS is also required to supply credit reporting agencies with information to update credit information for affected borrowers.
Students may direct questions to PEAKS at customerservice@peaksloans.com or (866) 747-0273, or the Consumer Financial Protection Bureau at (855) 411-2372.
Read a copy of the settlement here.
Request for Opinion
Official Request Summary RQ-0379-KP
Whether a political subdivision may require the Department of Public Safety to lift driver license renewal holds requested under Transportation Code chapter 706 if the political subdivision has not met the requirements for sending a clearance notice under section 706.005 or has not collected the reimbursement fee under section 706.006
Date Received
Tuesday, September 22, 2020
Official Requestor
Mr. Steven C. McCraw
Director
Texas Department of Public Safety
Post Office Box 4087
Austin, Texas 78773-0001
