Start the conversation
I've written and railed about rip-off student financial aid schemes here for years.
And based on all the very personal stories I've received, I know many of you are outraged as well – even more so because of your devastating first-hand experiences.
Make no mistake: For-profit education companies are (more often than not) "rip-off traps" that condemn unsuspecting students into indentured servitude to greedy companies' bottom lines.
Well, there may be a White Knight after all.
The Beginning of the End for the Student Rip-Off Trap
His name is Richard Cordray, and he's the Director of the Consumer Financial Protection Bureau (CFPB).
This guy is smart and aggressive and has already smoked out some of Wall Street's biggest scammers – including Fannie Mae, Bank of American, and AIG.
Now he's going after an even bigger scumbag company, filing a civil lawsuit against ITT Educational Services Inc.
In case you never heard of them, ITT Educational is one of the country's largest for-profit educational services companies, providing undergraduate and degree programs through its ITT's Technical Institutes and Daniel Webster College. In addition to its own schools, the company provides educational services to another 150 institutions in 40 states.
Among other allegations, Cordray's suit claims the company offered a zero-interest loan, payable in full at the end of a student's first academic year, assuming most students would never be able to repay it. Facing delinquency, the students were then forced to take out "high-cost private student loans" from the company to rollover unpaid obligations and continue tuition payments.
Cordray said, "ITT kept students in the dark about its lending model that it freely shared with investors. In fact, we found that ITT used its financial aid staff to rush students through an automated application process without affording them a fair opportunity to understand the loan obligations involved. In some cases, students did not even know they had a private student loan until they started getting collection calls."
About the Author
Shah Gilani is the Event Trading Specialist for Money Map Press. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.