Automatic Group Student Loan Relief Offered to Defrauded Borrowers

FOR IMMEDIATE RELEASE:
January 13, 2017
CONTACT: Sarah Schultz, sarah.schultz@younginvincibles.org, 202-734-6510

[Washington, D.C.] - The Department of Education announced today that federal student loan borrowers at the defunct American Career Institute in Massachusetts are eligible for automatic group discharge of their federal student loans under the recently finalized borrower defense rule. Investigations by the Department of Education and the Massachusetts Attorney General’s office, combined with admissions of wrongdoing by ACI, demonstrated that the school misled and deceived students, employed unauthorized instructors, and exaggerated its job placement rates.

“The decision to grant automatic group discharge lifts a huge weight off the shoulders of students who were deceived,” said Reid Setzer, Deputy Director of Policy and Legislative Affairs for Young Invincibles. “Discharging loans used to attend fraudulent institutions is exactly what the Department should do in cases like these. The Department has made sure that these defrauded borrowers can get back on track, without having to go through complex and confusing processes that can prevent them from obtaining relief. We hope the Department will continue to protect students from predatory actors and help restore the financial security of students whenever fraud has been found, so they can continue to pursue their educations.”

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