HARRISBURG—Attorney General Josh Shapiro led a coalition of six attorneys general to call on the U.S. Department of Education to cancel the federal student loan debt of thousands of Pennsylvania students who attended the for-profit Brightwood Career Institute locations across the Commonwealth.
“These borrowers sought out an education to build new skills and get ahead in their careers,” said Attorney General Josh Shapiro. “Instead, this institution misrepresented its credentials and left students in the dark. We are calling on the Department of Education to take action to help Pennsylvania borrowers and provide debt relief.”
Last year, action by the Office of Attorney General resulted in the cancellation of approximately $2.6 million in private Pennsylvania student loans held by 1,300 students who attended Brightwood Career Institute locations in Pennsylvania. The Borrower Defense Application submitted today seeks relief for student loan borrowers of Education Corporation of America (ECA), Brightwood’s parent company, due to ECA’s alleged misrepresentations to students regarding its accreditation status, its efforts to obtain a new accreditation, and its broken promises to students, including its promise of lifetime career counseling.
Accredited schools must meet defined standards of quality from an outside accreditor. Without accreditation, schools do not qualify for Title IV federal student aid programs that serve as a key source of revenue. In 2016, ECA’s accreditor was decertified. ECA then attempted and failed to obtain a new accreditor. Until all schools closed in 2018, the company consistently downplayed its suspect accreditation status and overestimated the likelihood that it would obtain new accreditation.
Throughout this time, ECA also recruited students and promised them education and career counseling services. The company further victimized these students by failing to provide those services and abruptly closing its campuses in December 2018.
Federal law permits the Department of Education to forgive federal student loans when borrowers were deceived in obtaining loans. In the application, the attorneys general urged the Department of Education to provide full relief to ECA students, including refunds of the money students already paid on those loans.
The approximately 7,000 borrowers who attended the Pennsylvania Brightwood locations from June of 2016 through December of 2018, owe approximately $50 million in federal student loans.
Since Attorney General Shapiro launched his Consumer Financial Protection Unit in July 2017, the unit has obtained more than $328 million in relief for over 126,000 Pennsylvania consumers. This number includes $89.67 million in restitution, $41.81 million in penalties and other payments, and $196.77 million in debt cancellation.
In addition to Brightwood, ECA also operated schools under the names: Virginia College, Ecotech, and the Golf Academy of America.
Joining Pennsylvania Attorney General Josh Shapiro in filing the Borrower Defense Application are the attorneys general of Maryland, California, Colorado, Virginia, and Alabama.