NEWS RELEASE: State Secures Private Debt Relief For Former Argosy UniversityPosted on Mar 1, 2022 in Main, News Releases
DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS
DAVID Y. IGE
CATHERINE P. AWAKUNI COLÓN
FOR IMMEDIATE RELEASE
Feb. 28, 2022
STATE SECURES PRIVATE DEBT RELIEF FOR FORMER HAWAII ARGOSY UNIVERSITY STUDENTS
Entities controlling Argosy student debt agree to cancel private debt across 12 campuses nationwide; includes $81,668 in relief for Hawaii students, bars further collection and negative credit reporting
HONOLULU — The Department of Commerce and Consumer Affairs’ Office of Consumer Protection (OCP) announced an agreement with the current owners of student debt taken out by Argosy University students to cancel outstanding principal and interest for students who attended in the years preceding the schools’ abrupt closure in 2019. A group of ten states joined the agreement, which will be filed in respective state courts and in a federal receivership court. In total, the agreement cancels nearly $2.1 million in “institutional debt” taken out by students at 12 campuses directly from the school. The multistate deal includes relief of $81,668 for students in Hawaii who attended Argosy’s Hawaii campus, in addition to Hawaii students who attended Argosy’s online campus. The agreement also prevents further collection and negative credit reporting against harmed students.
“This case should serve as a warning that the State of Hawaii will not tolerate any school that engages in deceptive or misleading practices in marketing its curriculum to students”, said Stephen Levins, executive director of OCP.
As detailed in the agreement filed in court, OCP alleged that when Argosy was purchased by Dream Center Education Holdings in 2017, it falsely marketed to prospective students that it was a “nonprofit” institution. The OCP also alleged that the owners misled students about their ability to obtain degrees and provided misleading and incomplete information leading up to the school’s ultimate closure. The schools issued so-called “institutional loan debt” to students who were enrolled based on these marketing and recruitment practices.
Mismanagement by Dream Center ultimately led to insolvency and closure of Argosy schools in 2019, which upended the lives of Argosy students in Hawaii. The schools ended up entering federal receivership, a process similar to bankruptcy that can limit the financial relief available to students and other aggrieved creditors. Once in receivership, ownership of the institutional student debt changed hands, but OCP and the multistate group were able to secure today’s agreement with the entities that now control the debt.
Joining Hawaii in the settlement are the states of Minnesota, Arizona, Colorado, Florida, Georgia, Illinois, Tennessee, Utah, and Virginia. The agreement will be filed in the Ohio federal court overseeing the receivership.
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Department of Commerce and Consumer Affairs
Email: [email protected]
Phone: (808) 586-7582