Editor's Note: The above video is a report from 2016 on a local college assisting ITT Tech students in finishing their degrees.

Washington Attorney General Bob Ferguson announced on Friday that 538 former ITT Technical Institute students in the state would receive a total of $5.1 million after a settlement with a student loan vendor.

Idaho Attorney General Lawrence Wasden announced on Monday that his office reached an agreement to pay 215 former ITT Technical Institute students in the state a total of $1.86 million.

According to a release from Wasden, the settlement involves 43 states and the District of Columbia. Idaho's settlement is one of many that will result in more than $168 million in debt relief for former ITT Tech students, Wasden said.

In his announcement, the Idaho OAG said students were subjected to abusive lending practices by Student CU Connect, or CUSO, which provided loans to cover ITT Tech students' tuition costs.

“ITT Tech subjected students to abusive lending practices and this settlement is a step toward fixing those transgressions,” Wasden said. “This settlement will provide relief to hundreds of Idahoans who attended ITT Tech and took on debts for a questionable education they could not repay nor discharge.”

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Wadsen's office alleged that ITT Tech offered its students temporary credit upon enrollment to cover any expenses not covered by federal student aid and that CUSO was aware of this practice. The loan was required to be repaid before the next academic year, and the Idaho OAG said ITT Tech and CUSO "knew or should have known that most students would not be able to repay the credit when it became due."

Then, when students could not repay the debt, ITT Tech would pressure students into taking loans with high interest rates from CUSO, Wadsen said. Students said they thought the credit was not due until six months after graduation, according to the announcement.

Students were under even more pressure to accept the loans to stay at ITT Tech because credits from the institution were not accepted by most other schools, Wadsen said.

Both ITT Tech and CUSO didn't inform students of the credit's true repayment cost until after the credit became a loan, Wadsen said. The loans currently have a projected default rate exceeding 90 percent, according to Wadsen.

CUSO will not collect outstanding loan debts as part of the settlement, Wadsen said. He added that CUSO "was organized for the sole purpose of providing the ITT loans," and will cease doing business. 

CUSO will also provide credit reporting agencies with updated information on those affected by the settlement, Wadsen said. Those eligible for the settlement will receive notice via email, according to the Idaho OAG. 

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