The ease follows after an investigation and legal action against CollegeAmerica.
President Biden recently cancelled another $130 million in student loan debt in CollegeAmerica, who were ‘ripped off’ by a Colorado institution, according to the administration.
The cancellation of $130 million in federal debt for more than 7,000 students who attended CollegeAmerica in Colorado was announced by President Joe Biden on July 25.
In a statement, Biden added, “These borrowers were misled, taken advantage of, and burdened with mountains of debt.”
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The Center for Excellence in Higher Education (CEHE), the parent corporation of CollegeAmerica, is accused by the Department of Education (ED) of misleading borrowers with fraudulent advertising and claims regarding the school’s alumni.
In a report published by moneywise, 7,400 students who enrolled at three CollegeAmerica campuses in Colorado between January 1, 2006, and July 1, 2020 are covered under Biden’s student relief decision.
The debt forgiveness on Tuesday will apply to all CollegeAmerica students from Colorado who enrolled between 2006 and 2020 and will be automatic.
According to the ED, it will start informing borrowers in August whether their requests for debt cancellation are approved. Federal loans for those impacted will be automatically discharged; no application is required.
In 2020 saw the closure of CollegeAmerica, a now-defunct private university, following a protracted inquiry and lawsuit filed by the state of Colorado against CEHE and its executives.
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CollegeAmerica had three locations in Colorado and closed down completely in 2021 after a successful lawsuit brought by the state, according to the Department of Education. (Center for Excellence in Higher Education subsequently appealed.)
It was impossible to get in touch with the Center for Excellence in Higher Education, which ran CollegeAmerica, for comment. Last year, the group filed a lawsuit against the Department of Education, alleging that the federal government had wrongfully singled out their schools and unlawfully withheld payments, including refunds for student financial aid. The Department of Education is attempting to get the lawsuit dismissed.
The DE asserts that an independent review of the state’s supporting records showed that CEHE had exaggerated graduate earnings, job placement rates, and the availability of many academic programs. In spite of the fact that up to 70% of borrowers who were enrolled in the Colorado campuses defaulted on these loans in various years, CEHE allegedly promoted its private loan product, EduPlan, as being “affordable” from 2007 to 2017.
