Dive Brief:
- The Consumer Financial Protection Bureau has sued ITT Educational Services Inc. and accused it of pushing inappropriate loans on students.
- The agency says the for-profit school offered zero-interest loans for the first year, knowing that students were unlikely to repay at the end of the year, and then pushed them into taking out loans to pay off the balance before starting their second year.
- The government wants restitution for the students, a fine, and an injunction against the company.
Dive Insight:
The troubles for ITT and other for-profit education companies do not end with this lawsuit. Taking part in the announcement of this suit were attorneys general from four states investigating ITT and other for-profit schools. New Mexico’s attorney general said his state is also suing ITT, alleging that misrepresentations were made to nursing students.