BOSTON — Students of the now-shuttered American Career Institute will have more than $30 million in federal student loans forgiven under a deal announced by Massachusetts’ attorney general.
Attorney General Maura Healey asked the U.S. Department of Education to cancel the loan obligations after her office sued the for-profit school over fraud allegations and the school admitted misleading students.
The decision announced Friday means nearly 4,500 students who attended the school’s five campuses in Massachusetts will have the balance of their loan debt wiped out and will be entitled to refunds for debt payments they’ve already made.
“This is a school that lures students in with promises of great careers and high salaries only to leave them with little or no education and a boatload of unaffordable debt,” said Healey.
U.S. Sen. Elizabeth Warren, a fellow Democrat, said American Career Institute preyed on students to rake in federal loan dollars.
“They didn’t build a business model to say ‘how is it that we can provide the best services?’” Warren said. “They said ‘how can we get access to federal loan dollars and federal guarantees and federal grants and then use that money to spend as little as possible on the educational portion and as much as possible in payouts to the investors.’”
The school operated in Massachusetts and Maryland before closing in 2013.
