ITT trustee sues Ed Department, lenders to help pay $1.5B in claims - James Paterson, Education Dive

A trustee responsible for resolving the bankruptcy of ITT Educational Services is suing the federal government and the financial institutions that backed a loan program connected to the for-profit college, according to The Wall Street Journal. She is seeking funds to pay for about $1.5 billion in student, teacher and vendor claims against ITT. Deborah Caruso is suing the Education Department and several financial backers that supported ITT through loans she says took advantage of low-income students and ignored ITT's troubles. Prior to its closure, the Education Department required ITT to put forth $94 million in assurances, which Caruso is trying to reclaim from a regulator. ITT closed its 100-plus locations in September 2016 with around 8,000 students still enrolled. For years prior to the closure, ITT faced questions from regulators about its marketing tactics and private loans that Caruso said gave students access to funds regardless of their ability to repay them. https://www.educationdive.com/news/itt-trustee-sues-ed-department-lenders-to-help-pay-15b-in-claims/533054/