ITT Tech Settlement: PEAKS, CUSO, and Federal Loan Discharge

If you borrowed money to attend ITT Technical Institute, the ITT Tech settlement is really a set of overlapping actions that together canceled billions of dollars in student debt. The three biggest are a $330 million discharge of PEAKS Trust private loans, a $168 million discharge of Student CU Connect CUSO private loans, and a $3.9 billion automatic discharge of federal student loans by the Department of Education. Most of this relief went out automatically. A smaller group of borrowers still needs to check their status or file paperwork to claim what they’re owed.

Which Relief Action Applies to You

People searching for a single “ITT settlement” usually find several. Which one covers you depends on the type of loan you took out and when you attended:

PEAKS Trust settlement, roughly $330 million, covering private loans originated through PEAKS Trust after action by the CFPB and multiple state attorneys general.
CUSO settlement, roughly $168 million, covering private loans from Student CU Connect CUSO after a separate CFPB action.
A $3.9 billion federal loan group discharge from the Department of Education, covering federal loans for anyone who attended ITT from January 1, 2005 through the school’s closure in September 2016.
Closed school discharge, a standing federal program for students enrolled at closure or who withdrew shortly before it.
Borrower Defense to Repayment, an individual application process for federal loans tied to school misconduct.

The private-loan settlements and the federal discharge run on separate tracks. You can qualify under more than one.

PEAKS Trust Private Loan Discharge

The CFPB and several state attorneys general reached a settlement requiring PEAKS Trust to stop collecting on all outstanding PEAKS loans, discharge every remaining balance, and ask consumer reporting agencies to delete all PEAKS-related tradelines from borrowers’ credit files.¹ The total relief was valued at about $330 million.

PEAKS had to send written notices to every affected borrower confirming the debt was discharged. You did not need to file a claim. If you carried a PEAKS balance at the time of the settlement, it should already be zeroed out and your credit file updated.

Student CU Connect CUSO Private Loan Discharge

A separate settlement announced in 2019 targeted Student CU Connect CUSO. CUSO was required to stop all collection activity, discharge every outstanding balance, notify affected borrowers, and request deletion of CUSO tradelines from credit reports.² The total forgiveness was estimated at $168 million.

As with PEAKS, no borrower action was required. If your credit report still shows a CUSO tradeline, treat that as an error worth disputing.

The $3.9 Billion Federal Loan Group Discharge

In August 2022, the Department of Education approved a group discharge canceling all remaining federal student loans for borrowers who attended ITT from January 1, 2005 through its September 2016 closure.³ The discharge totaled $3.9 billion and covered roughly 208,000 borrowers.

The key point: this was automatic. There was no application through Borrower Defense or any other program. If you borrowed federal loans for ITT during that window, the Department discharged them without action from you. Borrowers who had already made payments on the discharged loans were also eligible for refunds.

The federal window starts a year earlier than the private-loan class definition. Someone who attended ITT only in 2005 would qualify for the federal discharge but not the PEAKS class.

Closed School Discharge and Borrower Defense

Students enrolled at ITT when it ceased operations on September 6, 2016, or who withdrew within the 120 days before that date (on or after May 6, 2016), may qualify for a closed school discharge of their federal loans. This is separate from the group discharge. One catch matters: if you transferred your ITT credits to another school and completed a comparable program, you generally lose eligibility. If the new school refused to accept your ITT credits, the discharge stays available. Unlike the group discharge, closed school discharge requires you to contact your loan servicer and apply.

Borrower Defense to Repayment lets federal borrowers seek discharge when their school engaged in fraud or other misconduct. The Department of Education still accepts applications. For most ITT borrowers, the 2022 group discharge already accomplished what a Borrower Defense claim would have. If your loans somehow weren’t captured, you can apply online at StudentAid.gov or by mail to the Federal Student Aid Information Center in Monticello, Kentucky.

Cleaning Up Your Credit Report

Both private-loan settlements required the lenders to contact consumer reporting agencies and request deletion of loan tradelines, not just mark them paid or settled.¹ The federal group discharge should also have led to updated credit reporting on the canceled balances.

Pull your reports from all three bureaus at AnnualCreditReport.com and check that the discharged loans no longer appear as delinquent or outstanding. If you find errors, dispute them with the bureau directly. If the bureau doesn’t fix the entry within 30 days, file a complaint with the CFPB.

Taxes on the Canceled Debt

The American Rescue Plan Act of 2021 made all forgiven student loan debt tax-free at the federal level, but that provision expired on December 31, 2025. Starting in 2026, forgiven student loan debt may again count as taxable income unless Congress acts or another exclusion applies.

Timing worked in most ITT borrowers’ favor. The major discharges happened in 2019 (CUSO), 2020 (PEAKS), and 2022 (federal group discharge), all within the ARPA window. If additional forgiveness comes through in 2026 or later, whether by Borrower Defense approval or an income-driven repayment plan discharge, you could owe federal income tax on the canceled amount.

Two exclusions can still help:

Insolvency. If your total liabilities exceeded the fair market value of your assets immediately before the discharge, you can exclude the canceled amount from income up to the extent of that insolvency. Someone who owed $50,000 and had $40,000 in assets was insolvent by $10,000 and could exclude up to that amount. You claim the exclusion on IRS Form 982.⁴⁵
Public Service Loan Forgiveness. Discharge through PSLF stays tax-free regardless of when it happens.

State treatment varies. Some states automatically follow federal rules; others don’t. Check with your state’s tax agency or a tax professional if you received forgiveness and aren’t sure how your state treats it.

Avoiding Scams

Every big student loan action attracts scammers, and ITT is no exception. The CFPB flags several signs of a fraudulent debt relief company:⁶

Upfront fees. Charging you before providing help is illegal. Legitimate relief under these settlements is free.
Promises of instant forgiveness. No private company can negotiate a special deal with the Department of Education or a settlement administrator on your behalf.
Requests for your FSA ID or password. That login gives full control over your federal loans, and no legitimate entity asks for it through a third party.
Third-party authorization or power of attorney. A company that wants you to sign over communications with your servicer is cutting you out of the process.
Claims of government affiliation. Real government sites end in “.gov.”

You never have to pay someone to contact your loan servicer. Changing your repayment plan, applying for Borrower Defense, and checking your discharge status are all free through StudentAid.gov or by calling your servicer.

If You Never Received Relief

If you attended ITT during the relevant periods and think relief should have reached you but didn’t, start by identifying the loan type:

Federal loans. Log into StudentAid.gov to check your loan status. The group discharge should already appear. If it doesn’t, call the Federal Student Aid Information Center at 855-279-6207.
PEAKS or CUSO private loans. You should have received a written notice confirming discharge. If collection notices continue or your credit report still shows a balance, file a complaint with the CFPB at consumerfinance.gov.
Other private loans. Loans from lenders unrelated to ITT, such as Sallie Mae or a personal bank loan used for tuition, are not covered by any of these settlements. Those remain your obligation unless you pursue separate relief.

Keep copies of every letter you received from settlement administrators, servicers, or the Department of Education. If you later need to dispute a credit entry or prove a loan was discharged, that paperwork is your best evidence.

A separate class action against ITT Educational Services defines a Student Class that includes anyone who attended ITT Technical Institute between January 1, 2006 and September 16, 2016, or Daniel Webster College between January 1, 2009 and September 16, 2016.⁷ If you fall in those windows, the administrator’s site at ittstudentclaimsettlement.com has details on the claims process and any remaining deadlines.

1
Consumer Financial Protection Bureau. CFPB and Multiple States Enter Into Settlement with Owner of ITT Private Loans for Substantially Assisting ITT in Unfair Practices
2
Consumer Financial Protection Bureau. Consumer Financial Protection Bureau Settles with Student CU Connect CUSO over ITT Private Loan Program
3
The American Presidency Project. White House Press Release – Education Department Approves $3.9 Billion Group Discharge for 208,000 Borrowers Who Attended ITT Technical Institute
4
Office of the Law Revision Counsel. 26 U.S. Code 108 – Income from Discharge of Indebtedness
5
Internal Revenue Service. Instructions for Form 982
6
Consumer Financial Protection Bureau. Signs of a Student Loan Scam
7
ITT Student Claim Settlement. Frequently Asked Questions – ITT Educational Services, Inc.