The U.S. Department of Education announced $130 million in relief will be distributed for 7,400 CollegeAmerica students who have been affected by widespread misconduct. The July 25 news release said this was due to deceptive practices found in relation to salaries, job placements and loans.
"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," Colorado Attorney General Phil Weiser said in the release. "Protecting borrowers from predatory lending and helping Coloradans navigate through student loan burdens will continue to be a priority for our office."
The DOE found CollegeAmerica's parent company, the Center for Excellence in Higher Education, made widespread misrepresentations about graduate salaries, job placement rates, programs offered and private loan terms. This announcement is a result of a partnership between the Department and state attorneys general, working to deliver relief to affected student loan borrowers, the release said.
The investigation, led by AG Weiser, exposed CollegeAmerica's predatory practices. The Department reviewed extensive evidence, including internal documents, emails and testimonies from 40 witnesses, according to the release. The findings revealed that from 2006 to 2020, CEHE misrepresented graduate salaries, claiming high earning potential while actual earnings were significantly lower. They also inflated job placement rates, counting unrelated jobs as successful placements.
CEHE also falsely presented its private loan product as affordable, while many borrowers defaulted. The release added the institution misled students about the programs offered, falsely claiming qualifications for certain fields.
The relief marks a crucial step in holding "predatory" institutions accountable and prioritizes helping affected students, according to the release. Under President Joe Biden's leadership, the Biden-Harris administration approved more than $116 billion in relief to more than 3.4 million borrowers, including those affected by Corinthian Colleges and ITT Technical Institute closures.
The Department will notify eligible borrowers in August, granting discharges, zeroing out loan balances and deleting credit trade lines. The relief will be provided regardless of the borrower defense application status, the release reported.
