Mass. AG Wants Career Institute Debt Cleared

BOSTON (CN) — Targeting another for-profit school, Massachusetts Attorney General Maura Healey is requesting student loan forgiveness for over 4,400 students who were duped into attending the now-defunct American Career Institute.

Healey submitted an application last week to the U.S. Department of Education to cancel loans that had been made to the students of the for-profit school, known as ACI for short. The move follows the state's successful case against ACI for violations of the Massachusetts Consumer Protection Act.

Martha Coakley, Healey's predecessor, sued ACI in November 2013, 10 months after the abrupt closure of the school, for allegedly taking advantage of students and causing them to take out massive student loans without getting an adequate education in return.

ACI had offered various certificate programs, such as information technology and medical assisting programs, with tuition and fees that cost up to $23,000.

"For years leading up to its closure, defendants falsified documents and forged student signatures to maintain their accreditation and to continue to receive student loan proceeds, enrolled students who did not meet minimum qualifications, and then failed to provide students the education for which they incurred significant debts," the complaint alleged. "Defendants unfairly pursued profit without regard to their supposed career training mission and left students indebted beyond their means."

ACI ultimately admitted "to widespread violations of the Massachusetts Consumer Protection Act," according to the AG's office.

Following a consent decree, Healey filed her letter with the Department of Education. In November 2015, AG Healey sent a similar letter seeking loan forgiveness for former Corinthian Colleges students in Massachusetts, which has resulted in many such students having their debts eliminated.

"Thousands of students who took out loans to attend these predatory, low-quality programs are legally entitled to immediate forgiveness today," Healey said in a statement. "Not only did this school fully admit to lying to its students, it left them with millions of dollars of debt and no real career training. I urge the Department to utilize its power to finally get these students the long-overdue relief they deserve."

In its application, the AG's Office requested that the Education Department cancel all federal loans taken out by 4,400 students who attended ACI from January 2010 through the school's closure in January 2013, based on ACI's numerous admissions and violations of Massachusetts law.

Additionally, more than 1,400 of those students are entitled to loan discharges because they were enrolled at ACI at the time the school closed or withdrew in the four months prior to the school's closure, Healey said.

The Massachusetts AG's Office is in ongoing litigation with Corinthian Colleges and recently sued ITT Tech and an unlicensed for-profit nursing school for alleged unfair and deceptive practices. The state has also reached settlements worth more than $6 million with Kaplan Career Institute, Lincoln Tech, Sullivan & Cogliano, and Salter College.

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