Multistate settlement: Student Loan Xpress to forgive $113 million in debt
Jerry Brown (D-Calif.)
Chris Koster (D-Mo.)
(Legal Newsline)- Students from the now-defunct Silver State Helicopters LLC will have millions in tuition debt erased under an agreement between the school's loan provider and a dozen state attorneys general.
Student Loan Xpress will forgive a total of $112.7 million in debt for students who obtained non-government guaranteed educational loans to attend the Las Vegas, Nev.-based helicopter training school.
"These students did not obtain the helicopter instruction they were promised, yet Student Loan Xpress insisted that they pay off the full cost of their tuition," California Attorney General Jerry Brown said. "Without this agreement, Silver State flight school students would face a mountain of debt for training they never received."
The school began operating in 2002 as a small helicopter pilot training school. At its peak, the school operated 34 campuses in 17 states.
For at least two years, Cleveland, Ohio-based Student Loan Xpress was the preferred student lender for the school, providing approximately $172 million to more than 2,800 students nationwide.
By February 2008, Silver State Helicopters had discontinued operations and filed for federal bankruptcy protection.
When campuses closed, many students were then left owing Student Loan Xpress for training they never received, officials said.
"Students are a particularly vulnerable population, and it is a high priority that students who receive financial aid are protected from being unfairly treated throughout the aid process," Missouri Attorney General Chris Koster said. "We are pleased with the result of this multistate effort and will continue to be vigilant in protecting the rights of Missouri students."
In addition to California and Missouri, states participating in the settlement are: Florida Georgia, Idaho, Illinois, Montana, Nevada, Oklahoma, Oregon, Utah and Washington.
The multistate settlement requires Student Loan Xpress forgive up to 75 percent of the total amount borrowed by the majority of Silver State Helicopters students to resolve a pending class action.
The percentage of loan forgiveness for the remaining students will vary, depending upon the amount of training they successfully completed.
The settlement also bars Student Loan Xpress from reporting negative information to any credit reporting agency about students' restructured loans so long as future payments are made in accordance with the settlement agreement.
From Legal Newsline: Reach staff reporter Chris Rizo at email@example.com.