Bullock: Student Loans Forgiven for Cheated Silver State Students
HELENA – Attorney General Steve Bullock on Friday announced that Montana and 11 other states have negotiated a settlement with a private student loan provider, resolving an 18-month multistate investigation.
Bullock’s office filed the settlement agreement in district court in Helena today.
Student Loan Xpress will forgive a total of $112.7 million in debt for students who took out non-government guaranteed educational loans to attend a now-bankrupt helicopter training school, Silver State Helicopters, LLC., which was based in Nevada.
“Montanans who signed up to become pilots with Silver State Helicopters committed to student loans of up to $70,000 and, in most cases, got nothing in return,” Bullock said. “These days, it’s hard enough to pay back student loans when you do graduate, but to be left holding the bag without getting any qualifications is totally unfair.”
Of the over 50 students in Montana who signed up with Silver State Helicopters, 27 had loans through Student Loan Xpress and are eligible under the terms of the agreement. These students will be entitled to $1,355,201.87 in student loan forgiveness under the attorneys general and class action settlements.
Silver State Helicopters began operating in 2002 as a small helicopter pilot training school and ultimately operated 34 flight schools throughout the country. For at least two years, Student Loan Xpress served as the preferred student lender for Silver State Helicopters, providing approximately $172 million to over 2,800 students nationwide.
By 2008, Silver State Helicopters had discontinued operations entirely and had filed for bankruptcy. Most students were left owing Student Loan Xpress a substantial amount of debt for training and certifications they never received. The Montana Attorney General’s Office received a number of complaints about the school’s bankruptcy and the student loans still owed from Silver State’s Butte and Helena locations.
The settlement requires that Student Loan Xpress forgive up to 75 percent of the total amount borrowed by the majority of Silver State Helicopters students as part of its resolution of a pending class action. The percentage of loan forgiveness will vary based upon the number of flight certifications each student obtained.
In addition to the loan forgiveness, the agreement includes several terms of injunctive relief which will preclude Student Loan Xpress from providing negative information to any credit reporting agencies about settling students who failed to make payments on their loans prior to the settlement.
Under the attorneys general settlement, the relief available to the students will be administered through the related national private class action settlement filed October 27 in federal court in Florida. The settlement and benefits provided are available generally to students who were attending Silver State as of the date of its closure, February 4, 2008.
Former Silver State Helicopters students with questions about the Student Loan Xpress settlement should contact the attorneys for the class action lawsuit at: email@example.com.