$2.6 Million In Private Student Loans Will Be Forgiven Following A Settlement: Key Details

$2.6 Million In Private Student Loans Will Be Forgiven Following A Settlement: Key Details

A settlement settlement with a non-public student loan debt purchaser following the collapse of a for-profit faculty chain will lead to $2.6 million in student loan forgiveness for former students.

Pennsylvania Attorney General Josh Shapiro introduced the settlement yesterday. The settlement settlement is with Elevation Capital Partners, LLC, a student loan debt purchaser entity which acquired non-public student loans issued to students who attended Brightwood Career Institute places in Pennsylvania. The guardian firm of Brightwood, Education Corporation of America, abruptly closed its campuses in December 2018, following a denial of accreditation. Elevation Capital Partners then bought related excellent non-public student loan debt from the corporate.

“When Education Corporation of America closed down, it left thousands of Pennsylvanians with no degree and a huge financial burden. Today we’ve reached an agreement, and cancelled millions of dollars in debt for Pennsylvanians,” stated Attorney General Shapiro in a press release.

According to a press launch issued by Shapiro’s workplace, the settlement alleges that students who attended Brightwood campuses have been victims of misrepresentations by Education Corporation of America associated to its colleges’ academic high quality, accreditation standing, profession providers, and total monetary situation. Shapiro had argued that assortment on related non-public student loan money owed held by Elevation Capital Partners would have violated Pennsylvania debt assortment legal guidelines.

Shapiro indicated that student loan debtors affected by this settlement will probably be contacted straight by the Pennsylvania Office of Attorney General. Borrowers don’t have to take any affirmative steps to obtain a refund or have their money owed cancelled.

Shapiro’s actions are simply the newest steps by federal and state regulators to crack down on predatory faculties that always depart students with nugatory levels and unaffordable student loan debt. Last month, U.S. Department of Education Secretary Miguel Cardona introduced a coverage change to the federal Borrower Defense to Repayment program that can lead to student loan cancellation for 72,000 student loan debtors; the entire quantity of student loan forgiveness is predicted to be round $1 billion. The Borrower Defense to Repayment program permits federal student loan debtors to request student loan forgiveness if their college engaged in unfair, misleading, or predatory conduct.

The Borrower Defense to Repayment program solely offers aid for federal student loans, nonetheless, not non-public student loans, underscoring the significance of outcomes like Shapiro’s to supply aid to non-public student loan debtors. Advocates for student loan debtors have referred to as on the Biden administration to go a lot additional in addressing excellent student debt, significantly for student loans tied to predatory colleges, in gentle of the constraints of the Borrower Defense program.

“What we need from the Education Department is an overhaul of the current Borrower Defense process,” stated Toby Merrill, Director of the Project on Predatory Student Lending, in a press release following the administration’s latest modifications to the Borrower Defense program. “The Biden-Harris administration must now address these failings or else perpetuate a system that is stacked against the very students they are supposed to protect.”

Further Reading

Biden To Initiate Additional Student Loan Relief This Week — But Borrowers Demand Full Cancellation

72,000 Borrowers Will Get $1 Billion In Student Loan Forgiveness – Do You Qualify?

Is $10,000 In Student Loan Forgiveness Next, After Biden Administration Cancels $1 Billion?

Congress Passes Biden’s Stimulus Bill: 6 Takeaways For Student Loan Borrowers

Stimulus Bill Has This Hidden Student Loan Tax Benefit

Congress Makes Big Change To Income-Based Repayment: What Student Loan Borrowers Should Know

Senate Passes Stimulus Bill With Student Loan Tax Relief — Will It “Pave The Way” To Cancel Student Debt?

Here’s Everyone Who Wants Biden To Cancel Student Loan Debt (It’s A Big List)

Whether Biden Cancels Student Debt Will Depend On These 3 Things

Could These Student Loan Borrowers Be Excluded From Biden’s Forgiveness?

Can Biden Cancel Private Student Loans? 3 Options

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