Update Sought on Relief for Defrauded Students

May 22, 2017

Massachusetts Attorney General Maura Healey in a letter Friday sought a commitment from the Department of Education that it would follow through on providing debt relief for students who attended the now-defunct for-profit American Career Institute.

In January, just before the transition to the Trump administration, the department announced that all 4,500 student borrowers with outstanding loans from attending the Massachusetts-based for-profit chain would have their debt discharged. It was the first time the department had granted automatic relief to all students who attended an institution without requiring individual applications.

But in her letter to Acting Undersecretary of Education Jim Manning, Healey said her office has been contacted by hundreds of former ACI students in recent weeks regarding the status of their federal loans.

"These communications revealed that no ACI borrowers appear to have received a discharge of their federal loans pursuant to the borrower defense to repayment rule," Healey wrote.

She noted that previous informal attempts by her office to receive an update on the status of those loans from the department had gone unanswered. Healey sought from Manning an explicit statement affirming that the department would inform those borrowers' servicers of the status of their loans as well as a date by which those borrowers could expect resolution of the issue.

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