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Student Lending

Student Lending Feature The New York State Attorney General’s Office has worked to help students and student loan borrowers, including cracking down on predatory for-profit colleges, examining potential abuses in student loan debt collection, and holding the federal government to its legal duties to protect students.  For details on the Attorney General’s actions, see below.

Cracking down on predatory for-profit schools:

Aequitas Capital Management, Inc.:   In August 2017, Attorney General Schneiderman announced a settlement with Aequitas Capital Management, Inc., a company that worked with the now-defunct for-profit college company Corinthian Colleges, Inc. to provide private student loans to Corinthian students.   The settlement resulted in $2.4 million in loan forgiveness and debt relief for 350 Rochester-area students who attended Everest Institute, a Corinthian school.  https://ag.ny.gov/press-release/ag-schneiderman-announces-settlement-wil...

DeVry University. In January 2017, Attorney General Schneiderman reached a $2.75 million settlement with DeVry University based on findings that the school made misrepresentations about graduates’ employment prospects.  Pursuant to the settlement, DeVry agreed to pay $2.25 million in restitution to DeVry students.  See https://ag.ny.gov/press-release/ag-schneiderman-obtains-settlement-devry-university-providing-225-million-restitution

EDMC:  In November 2015, Attorney General Schneiderman was part of a $102.8 million multistate settlement with for-profit college operator EDMC.  Pursuant to the settlement, EDMC agreed to offer debt relief to graduates and to reform recruiting and enrollment practices. https://ag.ny.gov/press-release/ag-schneiderman-announces-1028-million-settlement-edmc-forgive-student-loans-and

Career Education Corporation:  In August 2013, Attorney General Schneiderman reached a $10.25 million settlement with Career Education Corporation for inflating job placement rates to attract students.  https://ag.ny.gov/press-release/ag-schneiderman-announces-groundbreaking-1025-million-dollar-settlement-profit

Holding the federal government to its legal duty to protect students:

• The New York Attorney General’s Office issued guidance for federal student loan borrowers ahead of the 10th anniversary of the Public Service Loan Forgiveness Program. https://ag.ny.gov/press-release/ag-schneiderman-issues-guidance-federal-student-loan-borrowers-ahead-10th-anniversary

• The New York Attorney General’s Office sued the Department of Education for abandoning the Borrower Defense to Repayment rule, a rule that would help protect students and taxpayers from abuse by for-profit schools. https://ag.ny.gov/press-release/ag-schneiderman-part-coalition-19-attorneys-general-sues-us-department-education

• The New York Attorney General’s Office also sued the Department of Education for refusing to enforce the Gainful Employment Rule. https://ag.ny.gov/press-release/ag-schneiderman-fellow-ags-file-suit-against-us-department-education-protect-gainful

• Attorney General Schneiderman led a bipartisan coalition of 30 AGs calling on Congressional leadership to omit proposed language from the Higher Education Act that would immunize student loan originators, servicers, and debt-collectors from state-level oversight and enforcement.  See letter