For Immediate Release
Media Contact: Bob Cooper
Date: October 27, 2009
Debt Relief Coming for Some Silver State Helicopters Students
(Boise) – 36 Idaho students of a bankrupt helicopter training school will receive nearly $1.5 million in debt relief from student loans as a result of a legal settlement, Attorney General Lawrence Wasden said. Students who borrowed from Student Loan Xpress and were enrolled at Silver State Helicopters at the time the school shut down will receive the benefits of the settlement negotiated by Wasden’s Consumer Protection Division.
Under terms of the settlement, Student Loan Xpress will forgive 75 percent of the total amount borrowed by the majority of Silver State Helicopters students. The percentage of loan forgiveness for the remaining students will vary, depending upon the amount of training each successfully completed. There is no need for students to file a claim. Eligible students will automatically get this benefit unless they "opt-out" of a federal class action settlement, which will be filed shortly.
“The closure of this school left many Idaho residents with significant debt and only an incomplete helicopter flight education to show for it,” Attorney General Wasden said. “I hope this settlement provides them some measure of relief.”
Silver State Helicopters began operating in 2002 as a small helicopter pilot training school and ultimately operated 34 flight schools throughout the country with a total of 2,700 enrolled students. For at least two years, Student Loan Xpress served as the preferred student lender for Silver State Helicopters, providing approximately $174 million to over 2,300 students nationwide. Records showed that only a small percentage of students graduated and drop-out rates were exceptionally high.
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. Attorney General Wasden’s office received 26 complaints about the company’s bankruptcy and the student loans still owed.
The agreement precludes Student Loan Xpress from providing negative information to any credit reporting agencies regarding students who failed to make payments on their loans prior to the settlement.
Idaho and 11 other states joined in the $112 million settlement, which resolves an 18-month investigation by the states.
A settlement in a related nationwide private class action case was filed today in federal court in Florida. Students who are eligible for the settlement will receive documentation from the class action attorney in the near future.
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