Attorney General Jason Miyares has announced that student lender Prehired will be providing over $30 million in relief to student borrowers who were victims of illegal student lending practices. The lender has been accused of making false promises of job placement and trapping students with "income share" loans that violated the law. Additionally, Prehired resorted to abusive debt collection practices when borrowers were unable to make payments.
The order, which has been approved by a federal court, requires Prehired to cease all operations, pay $4.2 million in redress to affected consumers, and void all outstanding income share loans, valued at nearly $27 million. Attorney General Miyares was joined by the Consumer Financial Protection Bureau (CFPB) and 10 other states in this lawsuit.
In a statement, Attorney General Miyares expressed concern for the students who were preyed upon by Prehired during a vulnerable period of transition. He stated, "Prehired preyed on young people during this time of uncertainty and adjustment, setting them up for failure rather than success. Today's action rights Prehired's wrongs and brings almost $100,000 worth of relief for affected Virginians."
Prehired, a Delaware-based company, operated a 12-week online training program that claimed to prepare students for entry-level positions as software sales development representatives with high salaries and a job guarantee. The company offered income share loans to help students finance their program costs. The order also names two affiliated companies, Prehired Recruiting and Prehired Accelerator, which pursued collection on defaulted income share loans.
The lawsuit against Prehired was filed in July 2023 by the CFPB and the states involved. The allegations included:
- Making false promises of job placement to students
- Issuing income share loans that violated the law
- Engaging in abusive debt collection practices
Under the order approved by the court, Prehired is required to:
- Cease all operations
- Pay $4.2 million in redress to affected consumers
- Void all outstanding income share loans
Students affected by Prehired's actions can submit a claim at https://cms.www.prehiredclaims.com/.
This news comes as a relief for the students who fell victim to Prehired's illegal practices. With the order in place, they can now seek the necessary relief and move forward with their lives. The collaboration between the Attorney General's office, the CFPB, and the states involved demonstrates a commitment to holding companies accountable for their actions and protecting consumers in the student lending industry.
To find out more, go to this link: https://www.oag.state.va.us/media-center/news-releases/2647-november-20-2023-attorney-general-miyares-obtains-order-requiring-prehired-to-provide-students-more-than-30-million-in-relief-for-illegal-student-lending-practices