The Consumer Financial Protection Bureau (CFPB) announced yesterday that students who had taken out private student loans from the for-profit University of the Rockies and Ashford University would not have to pay them back. Bridgepoint Education, the company that runs both colleges, was ordered to discharge debts totaling more than $24 million that had been made to students via Bridgepoint's in-house financial aid program.
The CFPB's statement went on to say that Bridgepoint was found guilty of using deceptive practices to convince students to take out these loans by misrepresenting how much students would owe in total and how much they would be required to pay back. In many cases, student borrowers were told they would be able to pay a minimum of $25 as their monthly payment only to receive a bill for much more. Some of these loans were made as far back as 2009, while others were made towards the end of Bridgepoint's loan program in 2013. In total, students paid back about $5 million, leaving almost $19 million unpaid.
In addition to forgiving the debt, Bridgepoint has been fined $8 million. A spokesperson for the company stated that Bridgepoint is not admitting or denying guilt in this matter but has simply agreed to the terms laid out by the CFPB in order to move on from the case.
Students who are affected by the decision will be contacted by Bridgepoint with information about how to have their loans forgiven.
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