The Biden administration will provide $130 million in student loans to 7,400 students who attended CollegeAmerica locations in Colorado between 2006 and 2020 after the U.S. Department of Education found that the university’s parent company was widely misrepresenting itself, state and federal officials announced Tuesday.
The Colorado Attorney General’s office assisted in the multi-year investigation into the now-defunct college, which closed its Colorado campuses in 2020.
“CollegeAmerica knowingly took advantage of students by luring them into low-quality, expensive programs with promises of high income and job placements that it knew were not achievable,” Colorado Attorney General Phil Weiser said in a Tuesday press release. “Protecting borrowers from predatory lending and helping Coloradans navigate student loan burdens will continue to be a priority for our firm.”
Borrowers will receive the waiver whether or not they have filed a borrower counter-defence against the repayment request, the press release said.
CollegeAmerica had locations in Denver, Fort Collins, and Colorado Springs.
The U.S. Department of Education found that CollegeAmerica’s parent company, the Center for Excellence in Higher Education, widely misrepresented graduate salaries and employment rates, the programs the university offered, and the terms of a private loan the school offered.
For example, the study found that the Center for Excellence in Higher Education prominently advertised to students that its graduates would earn high salaries, while the center’s data showed that Colorado CollegeAmerica graduates earned an average of just $25,000, out of school for five years — less than the salaries of high school graduates, the press release said.
CollegeAmerica’s campuses in Colorado also advertised overstated and falsified job placement rates of 70%, while internal numbers showed the true number to be 40%.
“This included counting a business administration graduate who worked as a produce clerk and a medical specialty graduate who worked as a waiter as successful placements,” the press release said.
The Department of Education will begin informing eligible borrowers about the debt relief in August. Borrowers will see all remaining loan balances reset to zero and credit trade lines removed, the press release said. All payments they have made to the department will be refunded.
This is a developing story that will be updated.