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For-profit college cancels $500M in student debt after fraud allegations

It sounds like the school was also in the banking business? persius01/06/19
Hell will freeze over before the AGs and/or the feds are thi williamdrayton01/07/19
That is true. I wouldn’t be surprised if the establis persius01/07/19
Couldn't they lean on the "sophisticated consumer" defense? 6figuremistake01/08/19
By definition, anyone taking out loans to attend a non-Ivy l debtslave1501/08/19
Judgie wudgies who pulled hard for a reason to tank the scam wutwutwut01/08/19
"It sounds like the school was also in the banking business? dingbat01/07/19
I read that but what does it mean? Does the school really h persius01/07/19
for the most part, they're just crediting themselves that mu dingbat01/07/19
if they discharged fed debt, that is an asset wiped off govt whiteguyinchina01/08/19
I like how it's consider an asset when most of it will never debtslave1501/08/19
as long as its an asset on the books, its possible to keep t whiteguyinchina01/08/19
persius (Jan 6, 2019 - 10:49 pm)

It sounds like the school was also in the banking business? Otherwise how could they cancel the student loan debt. These loans may have been dischargeable anyway.




For-profit college cancels $500M in student debt after fraud allegations

The settlement stems from allegations that Career Education Corporation lied about job placement rates and misled prospective students.


https://www.nbcnews.com/news/us-news/profit-college-cancels-500m-student-debt-after-fraud-allegations-n954486?cid=sm_npd_nn_fb_ma&fbclid=IwAR3caOPcPEvye3imfZie2HlshGJC3IAZZntLMs2nNuYWMU-3ps_-LPorFT4

A company that owns two national for-profit college chains said Thursday that it will erase nearly $500 million in debt incurred by former students as part of a settlement with 48 states and the District of Columbia.

The deal with Career Education Corporation will resolve allegations that it lied about job placement rates and misled potential students to get them to enroll. State attorneys general began investigating the company in 2014 following complaints from students and a damning report by the U.S. Senate.

Company officials on Thursday said they deny any wrongdoing but called the settlement an "important milestone."

"We have remained steadfast in our belief that we can work with the attorneys general to demonstrate the quality of our institutions and our commitment to students," Todd Nelson, the company's CEO, said in a statement.

Based in Schaumburg, Illinois, the company enrolls about 34,000 students across two chains, Colorado Technical University and American InterContinental University. More than 90 percent of its students are enrolled through online courses, according to the company.

The deal was signed by every state except California, which is negotiating a separate agreement of its own, and New York, which previously settled with the company.

Of the $493 million in debt being wiped out, the greatest share comes from borrowers in Florida, which will get $68 million in relief, followed by Texas, with $51 million. The debt stems from institutional loans the company issued to students.

Other terms of the deal require the company to pay $5 million to states to cover the cost of their investigations, and the company will now be required to give all prospective students a single-page disclosure with information including job placement rates, anticipated costs and the average earnings of graduates.

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williamdrayton (Jan 7, 2019 - 7:45 am)

Hell will freeze over before the AGs and/or the feds are this aggressive at investigating "Southwest State University" and "Old Established Private Nonprofit College of Law".

Oh wait, only for-profit schools "mislead" students about employment data. LOL

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persius (Jan 7, 2019 - 10:10 am)

That is true.

I wouldn’t be surprised if the established scam schools didn’t have a hand in pushing for this. It keeps outsiders from getting in on the racket. The AGs have turned a blind eye to the blatant fraud of established schools for years.

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6figuremistake (Jan 8, 2019 - 2:49 pm)

Couldn't they lean on the "sophisticated consumer" defense?

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debtslave15 (Jan 8, 2019 - 3:09 pm)

By definition, anyone taking out loans to attend a non-Ivy law school is not a "sophisticated consumer."

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wutwutwut (Jan 8, 2019 - 5:23 pm)

Judgie wudgies who pulled hard for a reason to tank the scam lawsuits said otherwise.

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dingbat (Jan 7, 2019 - 10:47 am)

"It sounds like the school was also in the banking business? Otherwise how could they cancel the student loan debt. These loans may have been dischargeable anyway."

"The debt stems from institutional loans the company issued to students."

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persius (Jan 7, 2019 - 10:53 am)

I read that but what does it mean? Does the school really have the money on hand to lend out or are they just crediting themselves that much money because mostly online and little overhead? Are they able to borrow from banks or federal reserve and take an override like a bank?

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dingbat (Jan 7, 2019 - 4:45 pm)

for the most part, they're just crediting themselves that much money.

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whiteguyinchina (Jan 8, 2019 - 12:49 pm)

if they discharged fed debt, that is an asset wiped off govt balance sheets

this cannot happen

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debtslave15 (Jan 8, 2019 - 1:32 pm)

I like how it's consider an asset when most of it will never be repaid.

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whiteguyinchina (Jan 8, 2019 - 5:46 pm)

as long as its an asset on the books, its possible to keep the aaa credit rating and issue treasury notes based on this student loan debt asset

we rich man, dont hate

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