The Biden administration will provide $130 million in student-loan relief to 7,400 students who attended Colorado locations of CollegeAmerica between 2006 and 2020 after the U.S. Department of Education determined the college's parent company widely misrepresented itself, state and federal officials announced Tuesday.
The Colorado Attorney General's Office aided in the multi-year investigation of the now-defunct college, which closed its Colorado campuses in 2020.
"CollegeAmerica knowingly took advantage of students by luring them into high-priced, low-quality programs with promises of high-earning potential and job placement that it knew were not attainable," Colorado Attorney General Phil Weiser said in a Tuesday news release. "Protecting borrowers from predatory lending and helping Coloradans navigate through student loan burdens will continue to be a priority for our office."
Borrowers will receive the relief regardless of whether they filed a borrower defense to repayment application, the news release said.
CollegeAmerica had locations in Denver, Fort Collins and Colorado Springs.
The U.S. Department of Education determined CollegeAmerica's parent company, the Center for Excellence in Higher Education, widely misrepresented graduates' salaries and employment rates, the programs the college offered, and the terms of a private loan the school offered.
For example, the investigation found the Center for Excellence in Higher Education prominently advertised to students that its graduates would earn high salaries when, in fact, the center's data showed Colorado CollegeAmerica graduates earned just $25,000, on average, five years out of school — less than the salaries of high school graduates, the news release said.
CollegeAmerica's Colorado campuses also advertised inflated and falsified job placement rates of 70% when internal figures showed the real number was 40%.
"This included counting a business administration graduate working as a produce clerk and a medical specialties graduate working as a waiter as successful placements," the news release said.
The Department of Education will begin notifying eligible borrowers in August about the debt relief. Borrowers will see any remaining loan balances zeroed out and credit trade lines deleted, the news release said. Any payments they made to the department will be refunded.
This is a developing story that will be updated.
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