Published: January 2019

Department of Education urged to extend loan discharge period for scammed students

In the wake of sudden closures of both Education Corporation of America (ECA) and Vatterott Education Holdings, advocates wrote to Education Secretary Betsy DeVos to express concern that over 25,000 students are being given incomplete, incorrect, and harmful information about their options for closed school discharge and information on transfer options. Advocates recommend important steps the Department can take so that students can immediately explore their options and understand what resources might be available to them in the wake of their school’s closure, including extending the window to discharge their student loans.

Another day, another scam school leaves students scrambling due to its sudden closure. The Department of Education has once again ignored multiple warning signs, and failed to require a letter of credit or take appropriate action to protect the students left holding largely useless credits and likely considerable debt from ECA and Vatterott Holdings owned schools.

In the wake of these closures, advocates urge the Department to take critical steps needed to provide clear guidance to the 22,000 students and 4,000 GI Bill beneficiaries that have been impacted, including extending the window for closed school discharge, sending discharge applications to all eligible students immediately, and holding the private equity owners and creditors financially liable for their abrupt closures to the fullest extent possible.

Lead Organization

The Institute for College Access & Success (TICAS)

Other Organizations

AFL-CIO | American Federation of Teachers | Center for Responsible Lending | Children’s Advocacy Institute | Consumer Action | Consumer Federation of California | East Bay Community Law Center, Consumer Justice Clinic Economic Mobility Pathways | The Education Trust | Generation Progress | Higher Education Loan Coalition | Hildreth Institute | Housing and Economic Rights Advocates | The Institute for College Access & Success (TICAS) | Maryland Consumer Rights Coalition | NAACP | National Association of Consumer Advocates | National Association of Consumer Bankruptcy Attorneys (NACBA) | National Consumer Law Center (on behalf of its low-income clients) | National Consumers League | PHENOM (Public Higher Education Network of Massachusetts) | Project on Predatory Student Lending | Public Law Center | Public Good Law Center | Student Action | Student Veterans of America | U.S. Public Interest Research Group (PIRG) | United States Student Association | University of San Diego Veterans Legal Clinic | Urban Assembly | Veterans Education Success | Veterans for Common Sense | Vietnam Veterans of America | Women Employed | Young Invincibles

More Information

Click here to read the full letter.

For more information, please visit TICAS.

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