Consumer Bureau Action Tracker

CFPB v. ITT Educational Services




ITT Educational Services, Inc.


Enforcement, Student Loans

In 2014, the CFPB sued ITT Educational Services, “one of the nation’s largest for-profit college chains,” over “predatory lending practices, pushing prospective students into costly loans and misleading them about future job prospects.”_ The case, which is still open, seeks a civil penalty, restitution for consumers, and an end to the practices utilized by ITT.

  • In February 2014, the CFPB announced a lawsuit against ITT Education Services, “one of the nation’s largest for-profit college chains.” CFPB’s lawsuit sought “restitution for victims, a civil fine and an injunction against the company.”

CFPB accused ITT Educational Services “of pushing students into predatory loans without properly explaining what they were signing up for,” some of whom “did not even realize they had taken out the loans until they received calls from collection agencies.” Since many credits received “did not transfer to many other schools,” ITT would leverage students’ educations against them, threatening “expulsion and the loss of money already spent on a first year to ‘coerce’ students into taking out more loans.” ITT even “projected that 64 percent of its students would default on those loans.” [Tim Devaney, “For-profit schools hit with lawsuit,” The Hill, 02/27/14]

  • The lawsuit against ITT marked “the CFPB’s first public enforcement action against a company in the for-profit college industry.” At the time of the lawsuit, ITT owned and operated “more than 135 ITT Technical Institutes and Daniel Webster College,” serving “more than 55,000 students at its campuses in 39 states and online.”

The CFPB alleged that “ITT encouraged new students to enroll at ITT by providing them so-called ‘tuition gap’ funding with a zero-interest loan called ‘Temporary Credit.’ This loan typically had to be paid in full at the end of the student’s first academic year,” even though, according to the lawsuit, ITT knew “that many students would not be able to repay their balances or fund their next year’s tuition gap.” The CFPB also alleged “that between July and December 2011, ITT pushed students into repaying their temporary credit and funding their second-year tuition by taking out high-cost private student loans.” [Bruce Horovitz, “U.S. sues college chain ITT over loans”, USA Today, 02/27/14]

  • The CFPB filed case number 1:14-cv-292 against ITT Educational Services, Inc., in the U.S. District Court Southern District of Indiana Indianapolis Division._ The case is open as of May 2017. [Enforcement Actions Page, “ITT Educational Services, Inc.,” Consumer Financial Protection Bureau, accessed 05/08/17]



1:14-cv-292 2/26/2014 2/26/2014

CFPB Sues For-Profit College Chain ITT for Predatory Lending

  • Consumer Financial Protection Bureau (CFPB)
  • Federal district court case
  • U.S. District Court Southern District of Indiana Indianapolis Division
  • Nonbank
  • Pending
  • Not Available



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