Loan provider forced to forgive $112.7 million in student debt
The state attorney general recently forced Student Loan Xpress Inc. to provide $112.7 million in debt relief to students facing a debt for helicopter flight instruction they never received. Of the $112.7 million, about $25.5 million will go to California residents who did not receive training they paid for, according to a statement from Attorney General Jerry Brown's office. The company was the "preferred student loan provider" for Silver State Helicopters, which had 34 campuses in 17 states, and included 2,700 students who paid about $69,900 each. In California, the company operated flight schools in Chino, Sacramento and El Cajon. The school filed for bankruptcy in February 2008, but Student Loan Xpress demanded that borrowers repay the full cost of the loans, according to the release. After several months of negotiations, state attorneys and Student Loan Xpress agreed to forgive an additional 2.5 percent of student loans if the adjusted loans are repaid within five years; refrain from providing negative information to credit-reporting agencies with respect to any loan restructured; and forgive interest between the dates Silver State Helicopters filed for bankruptcy protection and the end of 2009. Student Loan Xpress will also pay $125,000 in legal expenses to the states. Information: settlementquestions@gmail.com
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