Attorney General Phil Weiser seeks student loan relief for students misled by Education Corporation of America
April 28, 2022 (DENVER)— Attorney General Phil Weiser today joined a bipartisan coalition of state attorneys general to call on the U.S. Department of Education to cancel the federal student loan debt of thousands of students who attended schools operated by the for-profit company Education Corporation of America (ECA) from June 2016 through its abrupt closure in December 2018.
The borrower defense application submitted today seeks relief for student loan borrowers of ECA due to alleged misrepresentations to students regarding its accreditation status, its efforts to obtain a new accreditation, and its broken promises to students, including its promise of lifetime career counseling.
In Colorado, ECA operated one Ecotech Institute campus in Aurora and a Brightwood Career Institute in Denver. If the Department of Education approves the application, 410 student borrowers in Colorado will receive upwards of $5,307,000 in federal student loan forgiveness.
“Education Corporation of America misrepresented its accreditation status, financial status, and quality of education to induce students to enroll at its schools. Because of ECA’s conduct, students did not know that their educational future was in jeopardy and didn’t have an opportunity to consider transferring to a different university or take other actions to protect themselves,” said Weiser. “We are committed to standing up for student loan borrowers and protecting them from student loan debt racked up due to deceptive practices and false promises. That’s why we are urging the Department of Education to provide this much needed relief.”
Accredited schools must meet defined standards of quality from an outside accreditor. Without accreditation, schools do not qualify for Title IV federal student aid programs that serve as a key source of revenue. In 2016, ECA’s accreditor was decertified. ECA then attempted and failed to obtain a new accreditor. Until all schools closed in 2018, the company consistently downplayed its suspect accreditation status and overestimated the likelihood that it would obtain new accreditation.
Throughout this time, ECA recruited students and promised them education and career counseling services. The company further victimized these students by failing to provide those services and by abruptly closing its campuses in December 2018, leaving students without any notice to make other arrangements or appropriate plans.
Federal law permits the Department of Education to forgive federal student loans when borrowers were deceived in obtaining loans. In the application, the attorneys general urged the department to provide “full relief to ECA students, including refunds of the money students already paid on those loans.”
Those joining the letter application include the state attorneys general from Alabama, California, Colorado, Maryland, Pennsylvania, and Virginia.