EDMC Settlement Loan Forgiveness
For profit education company Education Management Corporation (“EDMC”) has agreed to forgive $102 million in outstanding debt to more than 80,000 former students as part of a settlement agreement filed with the district court on November 16, 2015. EDMC operates 110 schools in 32 states and online, including Argosy University, The Art Institutes, Brown Mackie College and South University. Please read our press release for additional information about the settlement.
519 former students from Idaho will be eligible for $504,000 total in loan forgiveness. Qualifying former students includes former students who meet the following criteria: (a) enrolled in a program of study with fewer than 24 hours of transfer credit, (b) withdrew from the program of study within 45 days of the first day of their first term, and (c) whose final day of attendance at an EDMC school was between January 1, 2006 and December 31, 2014. Former students who are eligible for loan forgiveness will be sent notices from EDMC after January 1, 2016. Federal student loans are not included in this settlement.
Volkswagen (VW) Consumer Settlement
A comprehensive settlement of many claims relating to VW’s “Dirty Diesel” emission fraud case was recently announced where a federal EPA lawsuit, a federal FTC lawsuit and consumer class action lawsuits were filed. Among other things, the settlement provides consumers with the option to either sell affected vehicles back to VW, or to have the vehicles repaired to fix the emissions violations.
The details of the settlement are available at www.VWCourtSettlement.com., and through the Federal Trade Commission website, www.ftc.gov/VWSettlement. Additional online resources will likely be made available by VW and the court.
Vehicles Covered by this Agreement
Although the diesel emissions fraud involved “defeat devices” installed in both 2.0 liter and 3.0 liter engine cars and SUVs, the current settlement covers only vehicles with the 2.0 liter engines. The parties continue to discuss what relief will be available later to owners of the 3.0 liter engines.
The specific 2.0 liter engine vehicles covered by the settlement are the following vehicles purchased or leased in the US:
|Model Year||Vehicle Make and Model|
|2009||VW: Jetta, Jetta Sportwagen|
|2010||VW: Golf, Jetta, Jetta Sportwagen, Audi: A3|
|2011||VW: Golf, Jetta, Jetta Sportwagen, Audi: A3|
|2012||VW: Golf, Jetta, Jetta Sportwagen, Passat, Audi: A3|
|2013||VW: Beetle, Beetle Convertible, Golf, Jetta, Jetta Sportwagen, Passat, Audi: A3|
|2014||VW: Beetle, Beetle Convertible, Golf, Jetta, Jetta Sportwagen, Passat|
|2015||VW: Beetle, Beetle Convertible, Golf, Golf Sportwagen, Jetta, Passat,
Consumers who purchased an affected vehicle have the option of either 1) selling it back to VW, or 2) having it fixed with an Approved Emissions Modification. Under either option, consumers will also receive additional restitution from VW.
Consumers who leased an affected vehicle have a similar option, and can either 1) terminate the lease with no penalty, or 2) have the car fixed with an Approved Emissions Modification. Under either option, lessees will also receive additional restitution from VW.
The Buyback and Restitution Option
For car owners who choose the Buyback option, VW will pay the National Automobile Dealers Association (“NADA”) value of the car as of September 2015 when the VW fraud became public, plus an additional cash payment as “Owner Restitution.” The minimum Owner Restitution payment for any vehicle—to be paid on top of the vehicle value—will be a minimum of $5,100, and some class members may receive as much as $10,000 in restitution if they choose the Buyback option.
For those owners who sold the car after September 18, 2015, the settlement equitably divides the Owner Restitution payment approximately 50/50 between the previous owner before September 18, 2015 and the current owner.
The Repair and Restitution Option
Car owners who want to keep their vehicle and get it fixed and modified to meet the EPA emissions requirements will need to wait for final EPA approval of VW’s proposed engine modifications. Once a modification is approved, consumers can bring their vehicle into a local dealership to be fixed at no cost to them; they also will receive at that time an Owner Restitution payment as described above. That means owners who keep their cars will receive between $5,100 - $10,000 each, in addition to the repairs at no cost. VW will also offer extended warranties and disclosures of the modifications made to fix the emissions problem.
Please note that the EPA approval process might not be complete for many months, perhaps as late as 2018 for some engine models. Consumers who want to keep their vehicles will therefore need to wait to find out whether their car can be fixed with an Approved Emission Modification. If a modification for a particular engine type ultimately is not approved, owners who waited for a potential repair and fix would be eligible to get a Buyback on the same terms as described above.
The Leased Vehicle Options
Lessees may terminate their leases without any termination fee and receive a cash Restitution payment equal to approximately half of what the owner of the identical car would receive under the buyback plan. Consumers with an active lease who want to hold on to their cars may choose to wait to see whether there will be an Approved Emissions Modification for their car, as described above. If those lessees elect to keep their cars under their leases with the repairs, they too will receive Restitution.
Timing of the Options
By late July 2016 the VW settlement website will allow consumers to enter their Vehicle Identification Number (VIN) and mileage to see the exact Vehicle Value and Owner (or Lessee) Restitution amount for their vehicle, based on its model year, trim line, and factory options.
VW has committed to processing approximately 5,000 bought back cars per week. VW has agreed to begin the Buyback program immediately after the Court grants final approval of the settlement, most likely by the end of the summer of 2016.
Use of Vehicles While Awaiting Fix or Buyback
If owners and lessees ask whether they may continue to drive their vehicles without fixing the emissions systems, even if the car might fail a state inspection, the answer for now is “yes.” Once an acceptable emissions system modification is acceptable, however, we encourage owners and lessees to either obtain the emissions fix or sell their vehicle back to VW.
Participating in the Buyback or Repair Programs
The summary here is not intended to provide specific guidance on participating in the VW Restitution program, as the state of Idaho is not directly administering the program, nor is Idaho processing any claims or handling any disputes. Consumers who have an affected vehicle should receive notice from VW beginning fifteen days after the Court’s approval of the Consent Decree explaining in more detail the process for obtaining a fix or buyback. In the meantime, consumers who believe they have an affected vehicle should go to the VW or FTC websites listed above and follow the appropriate steps to determine eligibility and to participate in any of the available remedies. In addition, many consumers will receive notices from the federal court regarding their rights as potential beneficiaries of the private class action lawsuits filed against VW. Those court class action notices will contain important information about the legal rights of VW owners and lessees, including instructions for participating in the program or opting out.
(Last updated 7/1/2016)