Commonwealth of Virginia
Office of the Attorney General
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For media inquiries only, contact:
Charlotte Gomer, Press Secretary
Mobile: (804) 512-2552
ATTORNEY GENERAL HERRING CONTINUES TO FIGHT FOR VIRGINIA STUDENT BORROWERS
~ Herring joins bipartisan coalition in asking Secretary DeVos to extend federal student loan forgiveness to all former Dream Center Students, including students of schools previously operated by Education Management Corporation ~
RICHMOND (February 4, 2020) – Attorney General&span;Mark R. Herring today joined a bipartisan coalition of 26 attorneys general in requesting that U.S. Department of Education Secretary Betsy DeVos use her authority to discharge the federal student loans of all students who were enrolled in now-closed schools operated by Dream Center Education Holdings, LLC (DCEH). Attorney General&span;Herring&span; and his colleagues previously called on Secretary DeVos in October 2019 to extend the timeframe for student loan forgiveness for schools that were operated by DCEH. DCEH took over Virginia schools previously operated by Education Management Corporation (EDMC) following a $2.9 million settlement EDMC reached with Attorney General Herring .
"Virginia student borrowers are the victims of DCEH's misconduct and mismanagement and they deserve to have their student loan debt forgiven,” said Attorney General Herring . "Secretary DeVos should do the right thing and make sure that all Virginians who were cheated out of an education by this deceitful organization are made whole again.”
Dream Center, a California-based nonprofit, went into receivership in January 2019. Under the federal "closed school discharge” regulation, former students may be eligible for a 100 percent discharge of their federal student loans if they were unable to complete their program because their school closed. Closed school discharge is only allowed for students who were enrolled at the time the school closed; were on an approved leave of absence when the school closed; or withdrew within 120 days of the school's closure, unless Secretary DeVos approves a longer period.
In a letter sent to Secretary DeVos in October 2019, Attorney General Herring and his colleagues asked Secretary DeVos to exercise her legal authority to expand the group of students eligible for "closed school discharge” to account for Dream Center's extraordinary misconduct and mismanagement. In November 2019, Secretary DeVos announced that she would extend the closed school discharge only for a very small number of former Dream Center students who were not previously eligible.
In today's letter, Attorney General Herring and his colleagues urge Secretary DeVos to go further and provide debt relief to all Dream Center students unfairly strapped with burdensome debt for which they have little to show. The coalition again outlined Dream Center's misconduct and mismanagement that prevented students from obtaining degrees and unfairly left them to repay federal student loan debt that they contracted to attend the failed schools.
DCEH took over schools that had previously been operated by Education Management Corporation (EDMC) following a 2015 settlement EDMC reached with Attorney General Mark Herring and other state attorneys general over their alleged deceitful practices. Under the terms of the settlement, EDMC forgave more than $2.29 million in loans for approximately 2,000 former students in Virginia. EDMC operated four education systems including Argosy University, The Art Institutes, Brown Mackie College, and South University, offering programs both online and at branch campuses in Virginia cities including Richmond, Virginia Beach, and Arlington.
Joining Attorney General Herring in sending today's letter are the attorneys general of California, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Idaho, Illinois, Iowa, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Vermont, Washington, and Wisconsin.
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