The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
A for-profit school that allegedly told students their loans would only cost $25 per month to repay must now forgive those loans, federal regulators announced Monday. The firm, publicly-traded Bridgepoint Education Inc., has agreed to discharge all outstanding private loans and refund some students after allegations that it engaged in unfair or deceptive practices, the Consumer Financial Protection Bureau announced Monday.
San Diego-based Bridgepoint currently has nearly 50,000 students, mostly enrolled online in schools it owns named Ashford University or the University of the Rockies. From 2009 to the present, the CFPB says students were encouraged to borrow money directly from the school to attend classes, and were told in some cases their loan payments would be as little as $25 per month.
“Bridgepoint deceived its students into taking out loans that cost more than advertised, and so we are ordering full relief of all loans made by the school,” said CFPB Director Richard Cordray. “Together with our state partners, we will continue to be vigilant in rooting out illegal practices facing student borrowers in the for-profit space.”
The settlement requires Bridgepoint forgive $18.5 million in outstanding loans and refund more than $5 million in loan payments that students have already made. The loans cover students enrolled from 2009 to 2015. Bridgepoint will also pay an $8 million penalty.
The CFPB has been more aggressive in its focus on for-profit colleges lately. It sued ITT Tech’s parent in February; ITT Education Services announced it was shutting down last week after the Department of Education said it could no longer enroll students receiving federal aid.
The CFPB also sued Corinthian Colleges in 2014, eventually winning a $530 million default judgment against the firm.
The CFPB’s Bridgepoint announcement focuses specifically on the school’s sales tactics.
“The Bureau found that the school deceived its students about the total cost of the loans by telling students the wrong monthly repayment amount. As a result, students at Bridgepoint were deceived into taking out loans without knowing the true cost, and were obligated to make payments greater than what they were promised,” the agency said in a press release. “Specifically, the CFPB found that Bridgepoint told students that borrowers normally paid off loans made by the school with monthly payments of as little as $25, an amount that was not realistic.”
Bridgepoint pointed reporters to a statement about the consent order posted on its website. In it, the firm said the refunds and forgiveness impact 1,277 students. The statement notes that the CFPB identified “only one area of concern with the loan program,” and that the CFPB did not raise questions about the firm’s educational credibility. The firm says the associated loan programs have been discontinued.
“This agreement simply allows us to return our full and undivided focus to our students and their success. We believe in the high quality of education our institutions provide and we will continue helping students achieve their goals of a quality and affordable college education,” said Andrew Clark, president and chief executive officer of Bridgepoint Education, in the statement.
The CFPB has also ordered Bridgepoint to remove negative information about its loans from borrowers’ credit reports, and to create a new financial and disclosure tool that makes it easier for students to understand their obligations when they borrow to attend the school. Students will be required to use the tool before enrolling.
Remember, student loan debt — and any associated missed payments — can hurt your credit. You can see how your students loans may be affecting you by pulling your credit reports for free each year at AnnualCreditReport.com and viewing two of your credit scores, updated every 14 days, for free on Credit.com.
Image: DeanDrobot
April 11, 2023
Uncategorized
September 13, 2021
Uncategorized
August 4, 2021
Uncategorized