About 7,400 students who attended the for-profit CollegeAmerica in Colorado from 2006 to 2020 will automatically get $130 million in student debt forgiven after the U.S. Department of Education found the college made widespread misrepresentations.
CollegeAmerica students will be notified in August that their federal student loan balance has been wiped clean. They also will be reimbursed for the amount they paid on those loans.
The education department used evidence provided by Colorado Attorney General Phil Weiser in its forgiveness decision, finding parent-company Center for Excellence in Higher Education gave false information about the salaries and employment rates of its graduates, the programs it offered, and the terms of a private loan product it offered.
“CollegeAmerica, they took advantage of people and preyed on vulnerable individuals,” Weiser said during a Tuesday news conference with the federal education department. “They had tens of thousands of TV commercials, radio, mailers, all of which promoted starting salaries or median starting salary that they claimed their degrees would give people access to. That was fundamentally untrue.”
Federal Student Aid Chief Operating Officer Richard Cordray credited Weiser’s office for its work exposing issues with College America. The Colorado attorney general’s office started investigating the for-profit in 2012, with a final judgment in favor of the state in 2020.
Cordray said issues included CollegeAmerica inflating job placement rates from 40% to 70%. The college also advertised higher salaries for its graduates, sometimes by twice as much.
“Nothing can replace the time these students spent, the years that have passed, and their trust that is broken,” Corduroy said. “What we can do, we will do, to try to make things right.”
The department’s actions discharge federal loans for the 7,400 students. Private loans, however, are not eligible for forgiveness.
The Biden-Harris Administration has forgiven $14.7 billion in relief for 1.1 million borrowers nationally whose colleges took advantage of them or closed, according to a news release.
Students at now-closed Corinthian Colleges, ITT Technical Institute, and Westwood College also have received loan relief.
Jason Gonzales is a reporter covering higher education and the Colorado legislature. Chalkbeat Colorado partners with Open Campus on higher education coverage. Contact Jason at email@example.com.