Oregon students will receive up to $3.8 million in debt relief under the agreement
Oregon Attorney General John Kroger today announced a multi-state settlement that requires Student Loan Xpress to forgive $112.7 million in debt for students who obtained loans to attend a now-defunct helicopter training school, Silver State Helicopters, LLC.
"Students who take out educational loans to improve their employment prospects should be encouraged, not taken advantage of," Keith Dubanevich, Chief of Staff and Special Counsel to Oregon Attorney General John Kroger.
Silver State Helicopters started in 2002 as a small pilot training school. It grew to operate 34 flight schools throughout the country. Enrollment peaked at about 2,800 students.
By 2008, the company had shut down and filed for bankruptcy.
Most students were left with substantial debt, but also without the training or certification needed to be a pilot.
For at least two years, Student Loan Xpress served as the preferred student lender for Silver State, providing approximately $174 million to nearly 2,300 students. Records show that only a small percentage of students graduated and that drop-out rates were exceptionally high.
The Oregon Department of Justice received complaints from 35 students who attended a Silver State training program in Salem. Approximately 82 former Oregon students may be eligible for debt forgiveness under the settlement agreement.
The settlement requires Student Loan Xpress to forgive 75 percent of the debt held by a majority of the former Silver State students. The remaining students will receive debt relief based on the amount of training they successfully completed. Not all former Silver State students will be eligible for loan forgiveness under the settlement.
In addition to loan forgiveness, the agreement prohibits Student Loan Xpress from providing negative information about Silver State students to credit reporting agencies regarding the restructured loans, so long as future payments are made in accordance with the settlement agreement.
Attorney General John Kroger leads the Oregon Department of Justice. The Department's mission is to fight crime and fraud, protect the environment, improve child welfare, and defend the rights of all Oregonians.
Tony Green, (503) 378-6002 firstname.lastname@example.org