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Debt to be canceled for former students of a closed Colorado Springs college

By 07/25/2023 | updated 2 years ago

Thousands of students once enrolled in a now-defunct college with a branch in Colorado Springs will see their debt wiped clean, the Department of Education announced on Tuesday.

About 7,400 former students of CollegeAmerica, a private Colorado-based institution with several campuses across Arizona and Colorado at the time of its 2020 closure, will have their collective debts worth $130 million canceled. The college was shut down after a Colorado Attorney General’s Office investigation found it had consistently lied to students about the school’s selectivity, jobs they could obtain post-graduation, and the salaries they could make.

Biden cancels debt for students who attended defunct Colorado college

CollegeAmerica purchased its first Colorado location in Denver in 1983, which would serve as its main campus through expansions to Fort Collins in 2001 and Colorado Springs in 2002.

The 22,000-square-foot Colorado Springs facility on North Academy Boulevard was newly renovated at the time of its closure and featured an online library, computer labs, an auditorium, a student lounge and classrooms, according to the college’s final school catalog in 2020.

CollegeAmerica students are the latest in the Biden administration’s $14.7 billion of approved relief for 1.1 million borrowers.

Colorado Supreme Court walks back appeals court’s reversal of $3 million fine against CollegeAmerica

“These borrowers were lied to, ripped off, and saddled with mountains of debt,” President Joe Biden said in a news release. “As long as I am president, we will never stop fighting to deliver relief to borrowers, hold bad actors accountable, and bring the promise of college to more Americans.”

CollegeAmerica has been caught in litigation on and off since Colorado sued the college in 2014 for its deceptive practices that saddled students with “unconscionable” loans they would struggle to pay off on the false understanding they’d earn more money quicker as CollegeAmerica graduates.

The judge imposed $3 million in consumer penalties, but he mistakenly believed the Attorney General’s Office did not need to prove CollegeAmerica’s actions had a significant public impact. In August 2021, a three-judge panel for the Court of Appeals reversed the judgment based on the judge’s error.

In May, the Colorado Supreme Court walked back the lower court’s reversal of the $3 million penalty. Justices ordered the Court of Appeals to closely review evidence before deciding whether to order a new trial on the matter.

Appeals court wipes away $3 million judgment against for-profit college, orders new trial

CollegeAmerica purchased its first Colorado location in Denver in 1983.
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