More than 1,500 Missouri college students who attended a for-profit college will receive loan forgiveness. EDMC, the company that owns Brown Mackie College in St. Louis, has reached an agreement with the Obama Administration and 39 states to forgive more than $102 million in student loans. The company, which operates multiple institutions across the country, has been accused of deceptive and aggressive recruiting tactics.
An investigation into EDMC began last year after accusations surfaced that the company was misrepresenting its accreditation status and graduation rates. As part of the agreement, EDMC will be required to provide statistics on graduation rates and the expected cost of attendance. In addition, EDMC will have to provide prospective students with information on the chances of course credits transferring to other institutions.
EDMC will forgive more than $102.8 million in loans held by more than 80,000 former students across the country.
For-Profit Colleges Face Tough New Regulations
Americans hold $1.3 trillion in higher-education debt, and some institutions have higher student loan default rates than others. The high rate of student loan defaults from for-profit colleges has caused the Obama Administration to put these institutions under the microscope.
Last year, the Department of Education announced new rules to protect students from predatory colleges, such as requiring greater transparency on post-graduation statistics. Additionally, these schools can no longer use dishonest recruiting tactics to attract new students. The case of Brown Mackie College can give former students and graduates of other for-profit institutions hope their loans will also be forgiven.