The Biden administration will allocate $130 million in student-loan relief to 7,400 individuals after the U.S. Department of Education exposed widespread misrepresentation of education benefits by CollegeAmerica’s parent company, the Center for Excellence in Higher Education, which has since shut down the three Colorado campuses.
CollegeAmerica students who attended the college’s Colorado campuses between 2006 and 2020 are set to receive a significant relief package, announced by state and federal officials on Tuesday
The relief will encompass loan forgiveness and refunds of payments already made, benefiting borrowers who pursued associate degrees in business, computer technology, and medical assisting, as well as bachelor’s degrees in business and computer science.
Colorado Attorney General Phil Weiser expressed strong disapproval of CollegeAmerica’s actions, stating that the institution deliberately lured students into overpriced, subpar programs by making false promises about high-earning potential and job placements. He emphasized that the protection of borrowers from predatory lending and assistance with student loan burdens remain top priorities for his office.
Notably, all eligible borrowers will receive the relief without needing to submit a “borrower defense to repayment” application. The debt relief will wipe out all federal student debt incurred from CollegeAmerica’s brick-and-mortar campuses in Colorado during the specified period. Additionally, the federal government will refund payments made by eligible CollegeAmerica Colorado borrowers toward their loans.
The Department of Education plans to notify eligible borrowers in August, with any remaining loan balances zeroed out and credit trade lines deleted
Education Department investigators discovered various misrepresentations made by CollegeAmerica, including inflated graduate salaries and job placement rates, further fueling the need for relief.
It is worth noting that the CollegeAmerica parent company wrongfully labeled private loans as “affordable” despite knowing that a significant number of borrowers defaulted on them. The closure of CollegeAmerica followed years of investigations and litigation, culminating in a favorable judgment for the state in 2020.
The relief marks a part of the Biden administration’s efforts to address issues of fraud and closures in colleges. President Biden remains steadfast in his commitment to providing relief to borrowers and holding accountable institutions that take advantage of students, ensuring the promise of college remains accessible to all Americans.
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