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CFPB Sues For-Profit College




by:
Peter L. Cockrell
Greenberg Traurig, LLP - McLean Office

Brett M. Kitt
Greenberg Traurig, LLP - Washington Office

Gil Rudolph
Greenberg Traurig, LLP - McLean Office

J. Scott Sheehan
Greenberg Traurig, LLP - Houston Office

 
March 4, 2014

Previously published on March 3, 2014

On February 27th, the CFPB filed suit in federal district court in Indiana against a for-profit college, alleging that the college engaged in unfair, deceptive, or abusive practices in the marketing and financing of its degrees.1 The CFPB is also alleging a violation of the Truth in Lending Act. Among other allegations, the CFPB alleges the following conduct:

  • Financing. The CFPB alleges that the college pressured students during an automated application process without providing them a fair opportunity to understand the private student loan obligations involved.

  • Job prospects. The CFPB alleges that the college misrepresented to students that when they graduated they were likely to earn sufficient income to repay their student loans.

  • Default prospects. The CFPB alleges that the college knew that approximately 64% of its students would default on their private student loans.

The CFPB is seeking restitution for students, a civil fine, and an injunction against the college.


1 See the complaint here http://files.consumerfinance.gov/f/201402_cfpb_complaint_ITT.pdf



 

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Peter L. Cockrell
Brett M. Kitt
Gil Rudolph
J. Scott Sheehan
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Business Law
Finance
 
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