• CFPB Sues For-Profit College
  • March 4, 2014 | Authors: Peter L. Cockrell; Brett M. Kitt; J. Scott Sheehan
  • Law Firms: Greenberg Traurig, LLP - McLean Office ; Greenberg Traurig, LLP - Washington Office ; Greenberg Traurig, LLP - McLean Office ; Greenberg Traurig, LLP - Houston Office
  • 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