A for-profit college chain with branches in Oklahoma is accused of predatory student lending practices in a lawsuit filed Wednesday in U.S. District Court in Indianapolis.
The Consumer Financial Protection Bureau filed the lawsuit against ITT Educational Services Inc., alleging ITT exploited its students and pushed them into high-cost private student loans that were likely to end in default.
The bureau is seeking restitution for victims, a civil fine and an injunction against the company.
“We don’t comment on pending litigation, other than to say that we believe that the bureau’s claims are without merit and we intend to vigorously defend ourselves against the charges,” ITT spokeswoman Nicole Elam said.
The company, based in Carmel, Ind., has more than 135 colleges in 39 states, including the ITT Technical Institute branches in Oklahoma City and Tulsa.
In the announcement of the lawsuit, the bureau noted this is its first public enforcement action against a for-profit college company.
ITT’s tuition costs are among the highest in the country in the for-profit industry, the consumer watchdog agency reported. Earning an associate’s degree at ITT can cost more than $44,000, while bachelor’s degree programs can cost $88,000.
That’s more than four times the cost of earning those degrees at Oklahoma’s public institutions.
A bachelor’s degree from the state’s regional universities costs about $21,200, while an associate’s degree from a community college costs about $6,674, according to tuition and mandatory fees reported by the Oklahoma State Regents for Higher Education.
ITT was one of 30 companies included in a two-year investigation into the for-profit college industry conducted by the U.S. Senate Health, Education, Labor and Pensions Committee, chaired by Sen. Tom Harkin, D-Iowa.
The committee’s final report, released in 2012, noted ITT is one of the largest for-profit education companies and its student loan default rates are higher than most.
ITT offers some of the most expensive programs of any for-profit college, forcing many students to borrow the maximum available federal aid and to take on additional private debt, the committee reported.
Go to http://files.consumerfinance.gov/f/201402_cfpb_complaint_ITT.pdf to read the complaint against ITT.