HARRISBURG – Attorney General Josh Shapiro today announced that his office has entered into an agreement that will result in the cancellation of approximately $2.6 million in private Pennsylvania student loans held by 1,300 students who attended schools operated by the now-defunct Education Corporation of America, including five former Brightwood Career Institute locations in Pennsylvania.
The agreement also provides for refunds of loan payments back to Pennsylvania borrowers who made payments on their loans to the debt buyer, Elevation Capital Partners, LLC. Since taking office in 2017, Attorney General Shapiro has obtained more than $62 million in debt cancellation for student loan borrowers.
“When Education Corporation of America closed down, it left thousands of Pennsylvanians with no degree and a huge financial burden. Today we’ve reached an agreement, and cancelled millions of dollars in debt for Pennsylvanians,” said Attorney General Shapiro. “Student loan debt is a life-altering hurdle for far too many in our Commonwealth, which is why we’re fighting for borrowers every day.”
The agreement with Texas-based debt buyer Elevation Capital Partners, LLC (ECP), permanently prevents the company from engaging in any collection efforts related to these students’ accounts. Further, ECP is prohibited from selling or transferring the accounts, must take action to cancel all outstanding balances, and must ensure they are properly coded by credit reporting agencies. Finally, consumers who paid on these loans to ECP since the purchase of the debt will receive the majority of their money back.
In December 2018, Education Corporation of America (ECA), which operated Brightwood campuses in Philadelphia, Broomall, Harrisburg, and Pittsburgh, abruptly closed due to its loss of accreditation and its failure to meet federal Department of Education financial requirements. ECP purchased the remaining student loans after ECA’s closure.
The agreement alleges that the underlying student debts were the result of ECA’s misrepresentations related to its schools’ educational quality, accreditation status, career services and overall financial condition, and any collection of these debts would therefore violate the Pennsylvania debt collection law. ECP voluntarily ceased collection of the accounts upon the Office of Attorney General’s request.
Borrowers affected by this settlement will be contacted directly by the Office of Attorney General and do not need to take any steps to receive a refund or have the debts cancelled.
The agreement was filed in the Allegheny County Court of Common Pleas by Chief Deputy Attorney General Jesse Harvey in the Attorney General’s Bureau of Consumer Protection.