The relief will include zeroing out remaining loan balances and deleting credit trade lines, while any payments made to the Department of Education will be refunded.
The relief will include zeroing out remaining loan balances and deleting credit trade lines, while any payments made to the Department of Education will be refunded.
The Biden-Harris Administration has announced a significant relief measure for 7,400 students who were enrolled at CollegeAmerica’s Colorado-based locations between January 2006 and July 2020.
In a press release, the United States Department of Education revealed that CollegeAmerica’s parent company, the Center for Excellence in Higher Education, engaged in widespread misrepresentations concerning its graduates’ salaries, employment rates, program offerings, and a private loan product.
Colorado Attorney General Phil Weiser led a comprehensive multi-year investigation and lawsuit against CEHE and its leadership, providing crucial evidence for the department’s decision.
The relief will be granted automatically to the affected borrowers, regardless of whether they have filed a borrower defense to repayment application.
The Department of Education’s partnership with state attorneys general has been instrumental in holding predatory schools accountable, leading to billions of dollars in relief for student loan borrowers.
Under Biden’s leadership, the Biden-Harris Administration has already approved $14.7 billion in relief for 1.1 million borrowers who were taken advantage of by their colleges or faced abrupt closures. Among these beneficiaries are hundreds of thousands of borrowers who received a fresh start from loans taken out at Corinthian Colleges and ITT Technical Institute.
“This announcement means a clean slate for thousands of students hurt by CollegeAmerica’s widespread misconduct,” said Federal Student Aid Chief Operating Officer Richard Cordray.
Weiser also praised the department’s decision for providing relief to Coloradans who were “mistreated” by CollegeAmerica.
“CollegeAmerica knowingly took advantage of students by luring them into high-priced, low-quality programs with promises of high-earning potential and job placement that it knew were not attainable,” he said.
“Protecting borrowers from predatory lending and helping Coloradans navigate through student loan burdens will continue to be a priority for our office,” Weiser added.
The evidentiary review conducted by the Department of Education revealed that CEHE made widespread misrepresentations at CollegeAmerica’s Colorado campuses.
Some of these deceitful practices included falsely advertising inflated job placement rates, misleading students about potential program offerings and qualifications, and presenting misleading salary data.
Starting in August, eligible borrowers will be notified of their approved discharges. The relief will include zeroing out remaining loan balances and deleting credit trade lines, while any payments made to the department will be refunded.
The department, meanwhile, encourages other states to provide evidence of wrongdoing by predatory schools to seek similar relief for affected students.
The borrower defense regulations, which took effect on July 1, now include a specific process for states to submit group applications, streamlining the relief process for those who have suffered from such deceptive practices.
So far, over 3.4 million people have been approved for more than $116 billion in loan discharges by the Biden-Harris Administration.
Additionally, a rulemaking process was initiated to explore alternative paths to provide further debt relief to as many borrowers as possible in the quickest manner.
