Proclaiming that he “won’t allow a generation of New Yorkers to get victimized by the very system that was created to help them get ahead, “ New York State Attorney General Eric Schneiderman today announced an aggressive crackdown on fraud and abuse in the student loan industry.
The announcement follows a proposed settlement that the Consumer Financial Protection Bureau and several state attorneys general, including Schneiderman, reached last week with Aequitas Capital Management, a student loan company that saddled students of the now-bankrupt Corinthian Colleges chain with loans they couldn’t afford. (The proposed settlement requires the approval of a U.S. District Court in Oregon.)
The proposed settlement would provide $183.3 million in loan forgiveness and reduction to 41,000 students.
Schneiderman’s office also announced last week that over 800 students of the for-profit DeVry University (now renamed Adtalem Global Education with the ticker symbol ATGE) would share in a $2.25 million settlement for deceptive ads that exaggerated the employment success of the school’s graduates. (That settlement was originally reached in January.)
In his announcement today, Schneiderman laid out a three-pronged attack his office will pursue against fraud and abuse in the student loan industry:
1. Pressing “full speed” ahead with cracking down on “predatory for-profit colleges and the loan servicers who enable them” and continuing to investigate potential abuses in student debt collection.