Illinois AG Settles With Westwood College

It has been reported that the lawsuit filed by Illinois Attorney General Lisa Madigan against Westwood College alleging violations of the consumer fraud act relating to criminal justice education programs has been settled. Story from ABCNEWS below:

Illinois Attorney General Lisa Madigan has reached a voluntary agreement with Westwood College to forgive $15 million in student loans.
ABC7 I-Team Exclusive

There are major developments affecting area students in an investigation of for-profit colleges, the ABC7 I-Team is reporting exclusively. The Illinois attorney general has reached a multimillion-dollar agreement with Westwood College.

“It’s like we wasted all this time for nothing,” said Kamilah Dew.

Chicagoans Kamilah Dew and her cousin Jamaal Jones dropped out of Westwood College’s criminal justice program after finding out it wasn’t regionally accredited and was being sued by Illinois Attorney General Lisa Madigan.

The I-Team first brought you their story in October. Now, the state has reached a voluntary agreement with the college.

“It all came about through students and former students who started complaining to our office a number of years ago about exorbitant costs, poorly accredited programs, failure to get a job in the field their degree was in,” Madigan said.

The college will put $15 million towards wiping out the loans criminal justice students obtained through Westwood. It covers students who enrolled as far back as 2004.

“It’s a credit to their account so any outstanding balance will be erased and any mention of it on your credit report it will be erased by Westwood at Westwood’s expense,” Madigan said.

The credit does not cover the students’ federal loans.

In a statement to the I-Team, Westwood said: “After nearly four years of litigation, the Office of the Illinois Attorney General voluntarily dismissed its claims and case with prejudice, with absolutely no legal or financial judgments made against the college. We voluntarily forgave debt owed by former criminal justice students who used the college’s institutional financing program. This agreement is in the best interest of students, and upholds and confirms our tradition of providing a quality education for our students and graduates, many of whom can be found working at businesses and law enforcement agencies across the state of Illinois.”

Westwood also told the I-Team that it discontinued its bachelor’s criminal justice program as part of a business decision. Their criminal justice associates degree is still available online.

Westwood was the first for-profit college that the Illinois attorney general sued. Madigan’s office is currently investigating 10 other for-profit colleges that do business in Illinois.


NYT: Government to Forgive Student Loans at Corinthian Colleges

From the New York Times:

“In a move against what he called “the ethics of payday lending” in higher education, Secretary of Education Arne Duncan announced Monday that the Education Department would forgive the federal loans of tens of thousands of students who attended Corinthian Colleges, a for-profit college company that closed and filed for bankruptcy last month, amid widespread charges of fraud.”


Secretary of Education Arne Duncan in Arlington, Va., in May. He said on Monday, “You’d have to be made of stone not to feel for these students.” Credit Jacquelyn Martin/Associated Press


CFPB Presses Congress to Change Bankruptcy Code for Private Student Loans

The Obama Administration’s CFPB (Consumer Financial Protection Bureau), helps student loan borrowers deal with private student loan debt.

According to the CFPB, “The largest subset of private student loan complaints we handled relate to the lack of repayment options and flexibility in times of distress.”

According to a new report filed by CFPB, CFPB is advocating to changes to the Bankruptcy Code to return dischargeability of private student loan debt (h/t to Georgetown).

In our education fraud practice, we have been dismayed many times over how even defrauded students of for-profit colleges cannot discharge their student loan debt, yet the for-profit institutions can avail themselves of the bankruptcy code’s protections if things go wrong for them.

If you are currently struggling to repay your private student loan debt, take a look at the CFPB’s help page.

Finally, contact your US Senators and Congressmen and ask them to support the CFPB’s efforts to reinstate bankruptcy protections for students with private student loans.



Opinions by Lawyer Jeffrey Antonelli