Students at Laramie's WyoTech technical school are eligible for a loan break after the company that owned the college was accused of falsifying job placement data in advertisements for its schools.
The announcement follows the sale of WyoTech from Corinthian Colleges Inc., a for-profit educational company accused of altering grades and student attendance records, to a Minnesota nonprofit.
Education Credit Management Corp. purchased more than 50 Everest and WyoTech campuses from Corinthian Colleges Inc. this week.
The deal came after Corinthian did not fully comply with the federal Education Department's requests for student data. The company was asked to sell 85 of its U.S. campuses and close 12 others.
The debt forgiveness agreement with the federal government settled a suit filed in September by the Consumer Financial Protection Bureau.
All the schools purchased by Education Credit Management Corp. have been transitioned from for-profit to nonprofit institutions, creating the largest nonprofit career college system in America, according to a Tuesday press release from the company.
“That’s a huge change for WyoTech,” said Caleb Perriton, director of education at the Laramie school. “It’s great for the community of Laramie because we’ve been a staple to the community.”
The new owner worked with the Consumer Financial Protection Bureau and the U.S. Department of Education to obtain about $480 million in loan forgiveness for former Corinthian students, according to the press release.
Students who borrowed through Corinthian’s now-defunct Genesis loan program will see an immediate 40 percent reduction in the principal balances.
The press release also announced a review of student programs. Schools will phase out programs that are not meeting acceptable job placement rates and change ones that need improvement.
Students in such programs will be allowed to continue their program, transfer to another course of study at their school free of charge, or receive a full tuition refund and withdraw from the school.
“Today, we begin delivering on our promise to transform the Everest and WyoTech schools we have acquired into first-rate career colleges where success is measured not by how many students we enroll but by how many students complete their programs and get fulfilling jobs when they graduate,” David Hawn, president and CEO of ECMC Group, said in the release.
The purchase did not include any of Corinthian’s California-based schools because of a pending lawsuit against Corinthian Colleges by the California Attorney General’s Office.
Students who are California residents and who attend ECMC-owned schools outside that state are being given the option of continuing in their programs or withdrawing and receiving a full refund of all educational expenses.
“It is in good faith that (the new owner) has decided to do this, and we’re meeting with every student individually to make sure they understand those options,” Perriton said. “There is a very poor misconception out there that California students are being kicked out of WyoTech, and that is not the truth.”
WyoTech is not currently recruiting new students from California.
A statement from the Institute for College Access and Success acknowledges the significant debt relief offered to students of former Corinthian Colleges but says the organization still has grave concerns about the sale.
In particular, most current and former Corinthian students will not be offered relief on their federal loans.
“For years, Corinthian inflated job placement rates and engaged in other unscrupulous practices to induce students to enroll and take out federal and private loans,” the release said. “Stronger rules, enforcement and oversight are needed to protect students and taxpayers from this kind of waste, fraud and abuse.”
WyoTech's new owner hired a Chicago-based law firm as an independent compliance monitor to oversee the review of student programs and ensure that the schools are complying with laws and accreditation standards.