The Consumer Financial Protection Bureau (CFPB) has filed suit against ITT Educational Services, Inc., a provider of a "college education" on-line, charging predatory student lending. The company has tens of thousands of students from forty states. The problem is that the education is not very good, as the credits that students earned “typically did not transfer to local community colleges or other nonprofit schools such as public or private colleges.”
Furthermore, the education there is not cheap; $44,000 for an associates degree, $88,000 for a bachelors degree. The cost is exacerbated by the student being pushed into private student loans even though they may have been eligible for government loans. The suit charges that “ students did not even know they had a private student loan until they started getting collection calls.” Plus: “ITT knew that most of its students would ultimately default on their private student loans; it projected a default rate for its students of 64 percent.”
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