Attorney General: Debt relief coming to students who were coerced into deceptive PEAKS loans
FRANKFORT, Ky. (WYMT) - Kentucky post grads from Technical Institute (ITT) will receive debt relief if they took out loans from PEAKS Trust (PEAKS).
Attorney General Daniel Cameron announced today that PEAKS had offered deceptive loans to students across the country.
ITT had joined PEAKS in offering zero-interest temporary credit to low-income students.
When students could not repay the temporary credit, ITT threatened expulsion to any student that did not then accept the terms of the PEAKS loans.
The acquisition then was that ITT was able to convert the uncollectible zero-based interest credits into revenue in order to make their financial statements attractive to investors.
“PEAKS Trust and Deutsche Bank entities violated consumer protection laws when they failed to explain the terms of temporary credits and coerced students into agreeing to the terms of PEAKS' private loan program,” said Attorney General Cameron. “Our settlement will provide debt relief for the financial loss suffered by Kentucky ITT students as the result of PEAKS' deceptive business practices.”
A settlement will provide $7.2 million for Kentucky students with PEAKS loans.
The overall settlement is for $330 million and will go out to 35,000 loan borrowers nationwide. PEAKS will also terminate all loan collections within 30 days.
Questions are asked to be directed to firstname.lastname@example.org or 866-747-0273.
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