Students who attended schools operated by the defunct Education Corporation of America will have their private student loans canceled.
Pennsylvania Attorney General Josh Shapiro announced an agreement on Tuesday that will result in the cancellation of about $2.6 million in private Pennsylvania student loans for 1,300 students who attended schools operated by Education Corporation of America.
ECA operated five former Brightwood Career Institute locations in Pennsylvania, including a Pittsburgh site that abruptly closed in 2018. Education Corporation of America lost its accreditation and failed to meet federal Education Department financial requirements, causing them to close their Pittsburgh location, along with campuses in Philadelphia, Broomall and Harrisburg.
The agreement also provides refunds of loan payments for Pennsylvania borrowers who made payments to the debt buyer Elevation Capital Partners, LLC (ECP).
“When Education Corporation of America closed down, it left thousands of Pennsylvanians with no degree and a huge financial burden,” Shapiro said in a news release. “Today we’ve reached an agreement, and cancelled millions of dollars in debt for Pennsylvanians. Student loan debt is a life-altering hurdle for far too many in our Commonwealth, which is why we’re fighting for borrowers every day.”
Since taking office in 2017, Shapiro has gotten more than $62 million in debt cancellation for student loan borrowers, according to the release.
The agreement to help former students at Education Corporation of America schools permanently prevents ECP from engaging in any collection efforts related to those students’ accounts. It also bars the company from selling or transferring the accounts.
Under the agreement, ECP must cancel all outstanding balances and ensure they are properly coded by credit reporting agencies.
Borrowers who paid on these loans since the purchase of the debt will receive the majority of their money back.
The agreement alleges that these student debts were the result of Education Corporation of America’s misrepresentations related to its schools’ educational quality, accreditation status, career services and overall financial condition. Therefore, collection of these debts would violate the Pennsylvania debt collection law, according to the agreement.
ECP voluntarily ceased collection on the debts at the request of the Office of the Attorney General.
Borrowers who are affected by this agreement will be contacted directly by the state Attorney General’s Office. They do not need to take any actions to receive a refund or have their debts cancelled.
The agreement was filed in the Allegheny County Court of Common Pleas by Chief Deputy Attorney General Jesse Harvey in the Attorney General’s Bureau of Consumer Protection.
Julia Felton is a Tribune-Review staff writer. You can contact Julia at 724-226-7724, jfelton@triblive.com or via Twitter .
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April 07, 2021 at 05:08AM
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Student loans canceled for students who attended schools operated by Education Corp. of America - TribLIVE
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