[Attorney General Bill McCollum has continued apace with the pretty good work done by his predecessor, Charlie Crist (whose mostly absentee performance as Governor/perpetual candidate) in combating social predators, human traffickers and profiteering insurance. He has settled nicely into his best niche since Congress. This press release is reprinted in full, because it’s such a wild story.
On the larger scale, I’m disappointed that Obama hasn’t canceled student loan debt as part of the stimulus plan, since that money represents just a drop in the bucket of larger debt issues, yet still such a big part of the debt-load accrued by an increasing number of young workers. Recent studies indicate that the average college graduate earns his or her B.A. at a cost of $20,000 in student loan debt. With tuitions increasing throughout the decade for colleges, universities and even community colleges and trade schools, those numbers are likely to increase, especially as financial institutions and the federal government curbs its largesse in response to the economic collapse.
The Florida AG’s office, BTW, can be followed, on Twitter.]
For Immediate Release
October 27, 2009
Contact: Sandi Copes
FLORIDA LEADS MULTISTATE SETTLEMENT WITH STUDENT LOAN PROVIDER
~ Settlement resolves issues related to now-defunct helicopter training school ~
TALLAHASSEE, FL –Attorney General Bill McCollum today announced that Florida and 11 other states have obtained a settlement with a private student loan provider, resolving an 18-month multistate investigation. Student Loan Xpress, a subsidiary of CIT Group, will forgive a total of $112.8 million in debt for students who obtained private educational loans to attend a now-defunct helicopter training school, Silver State Helicopters, LLC. Florida was the lead state in the investigation and the settlement negotiations; Florida victims will have over $17 million in student loans forgiven.
“This is an excellent resolution for those students whose dreams of flying were grounded, but who were still stuck with student loans to pay back,” said Attorney General Bill McCollum.
Silver State Helicopters began operating in 2002 as a small helicopter pilot training school and ultimately operated 34 flight schools throughout the country with a total of 2,700 enrolled students. For at least two years, Student Loan Xpress served as the preferred student lender for Silver State Helicopters, providing approximately $174 million to over 2,300 students nationwide. Records showed that only a small percentage of students graduated and drop-out rates were exceptionally high.
By 2008, Silver State Helicopters had discontinued operations entirely and had filed for bankruptcy. Most students were left owing Student Loan Xpress a substantial amount of debt for training and certifications they never received. The Florida Attorney General’s Office received over 300 complaints about the company’s bankruptcy and the student loans still owed. Silver State had school locations in Jacksonville, Ft. Lauderdale, Lakeland, and Melbourne with at least 375 Florida students.
The settlement requires Student Loan Xpress forgive 75 percent of the total amount borrowed to the majority of Silver State Helicopters students. The percentage of loan forgiveness for the remaining students will vary by the amount of training each successfully completed.
In addition to the loan forgiveness, the agreement includes several terms of injunctive relief which will preclude Student Loan Xpress from providing negative information about students who failed to make payments on their loans prior to the settlement to any credit reporting agencies with. Further, in situations where Student Loan Xpress acts as the exclusive private loan provider for students of a private post-secondary, trade or vocational institution not certified or accredited by state of federal authorities, the company must provide written disclosures to each
prospective student-borrower stating the loans do not constitute an endorsement of the school, its principals, or the quality of education or training offered.
A related national private class action settlement was also today filed in Federal court in Florida.